Blockchain Papers

Arya Ganendra, Neva Dian Permana, Muhammad Faiz, H. B. J. Clifford

Decentralized Finance (DeFi) proposes a paradigm shift towards a democratized financial ecosystem governed by its users. This vision of decentralization is predicated on the distribution of governance tokens. However, the verity of this claim lacks rigorous empirical validation, raising concerns about a potential "decentralization illusion." This study quantitatively investigates the concentration of governance power within leading DeFi protocols to empirically test this narrative. We employed a multi-faceted quantitative triangulation framework using on-chain data from three archetypal DeFi protocols, selected to represent the core sectors of the ecosystem: a lending market (ProtoLend), a decentralized exchange (ProtoSwap), and a yield aggregator (ProtoYield). Our methodology integrates: (1) Empirical Network Analysis based on on-chain voting power delegation to map the topology of influence; (2) Economic Inequality Metrics, including the Gini Coefficient and Lorenz Curve Analysis, to quantify the distribution of governance tokens; and (3) Systemic Risk Assessment via the Nakamoto Coefficient to determine the minimum number of colluding actors required for a 51% governance attack. The empirical network analysis revealed a distinct core-periphery topology across all protocols, indicative of highly centralized influence structures. This was substantiated by extreme economic inequality, with Gini coefficients of 0.91 for ProtoLend, 0.95 for ProtoSwap, and 0.89 for ProtoYield. Lorenz curves visually confirmed that a minuscule fraction of holders controls the vast majority of voting power. The Nakamoto coefficients were critically low, calculated at 8 for ProtoLend, 5 for ProtoSwap, and 11 for ProtoYield, exposing profound vulnerabilities to collusion and capture. In conclusion, our findings provide robust, triangulated evidence of a pervasive "decentralization illusion" within DeFi. Governance power is not distributed but is instead highly concentrated, replicating the plutocratic power dynamics of traditional finance. This concentration poses significant systemic risks and fundamentally challenges the core value proposition of the DeFi ecosystem.

Pablo Podadera, Immaculada Colomina Limonero

Abstract Spain’s system of governance is characterized by a complex web of vertical and horizontal intergovernmental relationships, reflecting its unique historical evolution from centralized authoritarianism to decentralized democracy. The continuous evolution of this framework aims to balance regional autonomy with national and European unity, ensuring effective governance in a diverse political landscape. Horizontal coordination refers to the cooperation between different levels of government, sectors, and organizations to achieve coherent policy outcomes. This approach is crucial in managing the complex administrative structure, which includes autonomous communities with significant powers. Effective horizontal coordination ensures consistent policy implementation, reduces redundancy, and promotes innovation through shared resources and knowledge. Experience with horizontal coordination highlights the importance of clear communication channels, joint decision-making processes, and the integration of different perspectives. However, regional disparities and political tensions can hamper these efforts, requiring continuous dialogue and adaptability of coordination mechanisms.

Dion Bongaerts, Thomas Lambert, Daniel Liebau, Peter Roosenboom

We investigate the drivers of vote delegation in Decentralized Autonomous Organizations (DAOs), using the Uniswap governance DAO as a laboratory. We show that parties with fewer self-owned votes and those affiliated with the controlling venture capital firm, Andreesen Horowitz (a16z), receive more vote delegations. These patterns suggest that while the Uniswap ecosystem values decentralization, a16z may engage in window-dressing around it. Moreover, we find that an active and successful track record in submitting improvement proposals, especially in the final stage, leads to more vote delegations, indicating that delegation in DAOs is at least partly reputation- or merit-based. Combined, our findings provide new insights into how governance and decentralization operate in DeFi.

Mladen Ostojić

Socialist Yugoslavia was a one-party state that extensively cultivated citizen and worker participation in decision-making at their place of residence and their place of work. From the early 1970s, Yugoslav authorities made radical steps toward the decentralization of power through the transfer of jurisdiction from the federal level to the republics and from the republics to municipalities. The Yugoslav doctrine of self-managing socialism also entailed the ‘socialization’ of the state through the transfer of functions from state institutions to self-managed communities and organizations, which mostly occurred at the level of municipalities. This chapter gives an overview of how Yugoslav self-management was designed at the municipal level; it is an examination of the institutional setup of local communities, an institution that aimed to promote direct citizen engagement in decision-making at the local level. Through a meticulous analysis of official thinking on self-management at the municipal level, this chapter outlines how municipal governance was conceptualized and implemented through the enactment of the 1974 Constitution. By drawing on a combination of primary sources, secondary literature and expert interviews, the chapter also gives an overview of how local communities operated in late socialism. Special attention is given to the role of sociopolitical organizations in the work of local communities and the extent to which they acted as catalysts or impediments to the articulation and fulfillment of the needs and interests expressed by citizens in local communities. Finally, the interactions between local communities, municipalities and city authorities are examined through a case study focusing on the introduction of the voluntary contribution financing mechanism in Belgrade in the 1980s. This case study gives valuable insight into the extent to which local communities allowed citizens to shape decision-making at the level of the city and raises further questions regarding the extent to which the Yugoslav self-managing system met the proclaimed goals of direct socialist democracy.

Sarit Markovich

No abstract is available for this record.

Aneta Spendzharova

Drawing on an integrated analysis of the latest European Union (EU) economic and financial governance reforms in the 2020s, we glean a new European economic governance paradigm. This article unpacks the main features of this new form of European gouvernement économique. The article focuses particularly on the set of policies adopted by two key actors in European economic and financial sector governance – the European Commission and the European Central Bank (ECB) – to advance the ‘green transition’ toward a carbon neutral EU economy by 2050. The new EU gouvernement économique aims to steer the Union towards a ‘net zero’ emissions economy by 2050, albeit important recent studies (European Court of Auditors 2023) have raised concerns that this ambition may not be realistic. It has larger financial means at its disposal considering the ‘traditional’ EU budget, combined with newly set-up supranational investment funds available through the NextGenerationEU (NGEU) programme. Moreover, it unfolds in a more complex polycentric system of EU economic governance (Ostrom 2010; Schmidt 2023; Vogler 2020; van Zeben and Bobic 2019) than envisioned in the older gouvernement économique blueprints of the 1990s. Faced with ‘wicked’ policy problems in this decentralized governance setting, such as the climate crisis, a global public health crisis and war at its doorstep, the EU institutions have to resolve the tension between multiple policy objectives, such as pursuing economic growth and ensuring low inflation. Table 1 provides an overview of the main distinctive features of the EU's ‘new’ gouvernement économique, focusing particularly on features that show a clear contrast in the 2020s, compared to the earlier blueprints from the 1990s. Financial instruments (EU level) Prevailing mode of governance Centralized, Commission in the lead. Decentralized, Commission as an orchestrator, together with other EU institutions, such as the ECB In short, this article argues that the European ‘green economy’ to support the green transition has superseded the older concept of gouvernement économique as an organizing principle of contemporary EU economic and financial sector governance. An integrated analysis of the recently adopted EU economic and financial sector governance policies and reforms as well as the (new) financial instruments launched in the aftermath of the Covid-19 pandemic yields three important findings summarized below, which form the axes of this article. First, the European Commission has reinforced and expanded its leading role in steering European economic governance through a mission-oriented policy approach (Mazzucato 2018), especially considering its leading role in the European Green Deal (EGD). Its leadership was shown by issuing the NGEU ‘corona recovery’ bonds and by monitoring the implementation of the Recovery and Resilience Facility (RRF) in the member states, now integrated in the European Semester. Second, now the Commission has substantial financial means which it can steer toward achieving the Union's long-term green transition. These expanded financial means become evident when we consider in an integrated way the traditional EU budgetary instruments in the multi-annual financial framework (MFF) 2021–2027, supplemented with the new EU investment mechanism NGEU to fund the green transition, foster the Union's economic recovery from the Covid-19 pandemic and the special financial assistance instrument European Stability Mechanism albeit outside the ‘regular’ EU decision-making framework. In fact, the EU is projected to become the fifth largest bond issuer by 2025, compared to the individual EU member states (European Commission 2023a). Third, the Commission works closely with the member states and with other EU institutions, such as the ECB, as an ‘orchestrator’ in the contemporary complex polycentric system of EU economic and financial sector governance. In contrast to earlier EU economic governance blueprints, the current approach does not seek further centralization and a hierarchical organization. Rather, it entails transferring more responsibility to and demanding more commitment from the member states in order to accommodate diverse national growth models, developmental trajectories and preferences (Ban and Helgadóttir 2022; Blyth et al. 2022; Hodson and Howarth 2023; Mertens et al. 2021). The Commission's interaction with the ECB is particularly important to unpack, as the ECB has taken a firm stance to support the transition to a carbon-neutral economy while, of course, staying within its policy remit of keeping prices stable and banks safe. Furthermore, inflationary pressures have become a challenge for citizens and businesses alike during 2021 and 2022. Rising inflation has negatively impacted citizens, while the rising interest rates to tame inflation have generated unintended consequences for bank balance sheets and, ultimately, for the stability of the European banking sector. These developments have prompted further actions by the ECB to reconcile the policy objectives of financial and economic stability, on the one hand, and price stability, on the other hand, especially in the aftermath of Covid-19 (Quaglia and Verdun 2023). The next sections elaborate on each of these three axes in turn. It is, of course, important to note that the concept of an EU gouvernement économique has a rather polarizing track record in European political economy. The earlier blueprints from the 1990s reflect heavily French economic thinking at the time, for example, former French Prime Minister Pierre Bérégovoy's proposals. These blueprints aimed for more coordinated fiscal and economic policies of the EU member states through the Stability and Growth Pact and the annual macro-economic policy evaluation cycles conducted by the Commission, which offered an unprecedented insight into national economic thinking and planning (see Howarth 2002 and Verdun 2000 for the role of French policymakers in this debate; Dyson 2002). However, critics of the concepts emphasized the contested adoption of the Maastricht Treaty in 1992, evoking connotations of supranational dirigisme, driven by a Commission detached from the member states' national economic priorities and concerns, even threatening to stifle vibrancy and innovation, thus potentially damaging the competitive edge of the ‘Northern core’ economies (Dyson 2002; Howarth and Verdun 2020). Since the early 2000s, the aptly named ‘post-functionalist’ turn (Hooghe and Marks 2009) has only given rise to a more polarized public opinion in the EU member states, greater Euroscepticism and more contestation regarding the place and the role of the EU in coordinating and guiding member states' national economic policies (Börzel 2016; Halikiopoulou 2018). Let us now take stock of the distinctive features of the recent EU economic and financial sector reforms to foster the green transition. To begin with, the European Commission has reinforced and expanded its leading role in steering European economic and financial sector governance, especially through leading the implementation of the EGD, issuing the NGEU corona recovery bonds and monitoring the implementation of the RRF, now integrated in the European Semester. It is notable that the Commission has opted not to work through hierarchical governance modes, such as centralization and maximum harmonization, which are increasingly seen as politically controversial, especially for the member states. To the contrary, in guiding the green economy transition, the Commission gives more space to the member states to choose their national economic policies in the RRFs, tailored to their own developmental priorities and objectives. The Commission has opted for a more accommodating approach in monitoring and guiding the implementation of the RRFs in the European Semester, perhaps reflecting criticisms of excessive dirigisme and top-down steering during earlier cycles, especially during the eurozone crisis (Schelkle 2017). Recognizing the threats posed by climate change and environmental degradation, the Commission led by Ursula von der Leyen launched the EGD in 2020, with the ambitious mission to make the EU ‘the first climate-neutral continent’ by 2050 (European Commission 2021). While this goal still echoes the so-called ‘Lisbon agenda’ to modernize the European economy and ensure its global competitiveness as well as social inclusion, the EGD displays the features of mission-oriented innovation policy (MOIP) approach (Mazzucato 2018). The EGD seeks to achieve no net emissions of greenhouse gases in the EU by 2050 and a shift toward a new economic growth model decoupled from resource use, inviting the active participation and contribution of the private sector and citizens (European Commission 2021). The Commission has explicitly relied on Mazzucato's (2018) ‘mission-oriented approach’ for the EU economy to navigate economic change in contemporary capitalism, considering the magnitude of the policy challenge to deliver on the EGD. According to this approach, coordinating public and private sector policies on a massive scale is necessary to radically change the mechanisms that govern the (economic) value distribution. New types of MOIP collaborations, especially public–private partnerships, are particularly important. This is visible in contemporary EU economic governance when we consider the ‘industrial policy’ component of the EGD. For example, the Commission (2021) has stressed that ‘the Green transition presents a major opportunity for European industry by creating markets for clean technologies and products’. It recognizes that the legislative and policy proposals implementing the EGD affect entire value chains in sectors, such as energy and transport, agriculture, construction and renovation, and have the potential for new, and more sustainable, job creation in the member states in these sectors through a more pro-active industrial policy. Especially since the mid-2010, there has been a clear rise and renewed attention given to EU industrial policy as well as greater integration of different industrial policy functions at the supranational EU level (Bulfone 2023; Di Carlo and Schmitz 2023). The interplay of functional, cultivated and political spillovers, driven especially by the Franco-German backing of more pro-EU industrial policy positions since 2016, explains the timing of the rise of this more ambitious and far-reaching EU industrial policy (Di Carlo and Schmitz 2023). Nevertheless, the nature of the policy area and related externalities explain why some areas, such as ‘clean’ energy production, have advanced faster than others (Di Carlo and Schmitz 2023; Prontera and Quitzow 2022). Second, now the Commission has substantial financial means, which it can mobilize to achieve the long-term green transition objectives of the Union. These expanded financial means become evident when considering in an integrated way the traditional EU budgetary instruments in the MFF 2021–2027 with the new EU investment mechanism NGEU to fund the green transition and foster the Union's economic recovery from the Covid-19 pandemic. The start of the implementation of NGEU in 2021 means that EU bonds are already here, even though both public opinion and key member states remain divided on the desirability (and viability) of common EU bonds as a ‘solidarity’ financial instrument to raise capital and pay up for common EU policy objectives. In fact, the Commission's (n.d.) recent rhetoric on debt issuance stresses that ‘it [the Commission] is a well-established name in debt securities markets, with a strong track record of successful bond issuances over the past 40 years’. Importantly, the recently adopted NGEU package marks a radical departure from previous EU economic and financial policy constrained by the ‘balanced budget’ rule at the EU level, with deficit spending precluded by the EU treaties. The Commission now has temporary powers to borrow from the international financial markets in order to finance NGEU and, consequently, implement the EGD (for more on the EGD, see Dyrhauge and Kurze 2023; Eckert 2021). In general, EU borrowing is executed using multiple instruments, including EU Bonds, EU Bills and NGEU Green Bonds (European Commission n.d.). There are precedents for joint EU borrowing with a very limited remit, for example, for Euratom, SURE (the EU's programme to finance short-term employment schemes across the EU and keep people in jobs during the Covid-19 pandemic) and the Macro-Financial Assistance+ programme for Ukraine, but NGEU Green Bonds scale up this borrowing considerably. In fact, the amount is such that the EU as an entity is projected to become the Union's fifth largest bond issuer by 2025, placed immediately after the four largest eurozone bond issuers, namely, France, Italy, Germany and Spain (European Commission 2023a). Furthermore, through issuing up to €250 billion of ‘green bonds’ as part of NGEU funding plans, the Commission will become the largest issuer of green bonds globally (European Commission 2023a). This significant development regarding the EU as a borrower further substantiates Braun and Gabor's (2020) findings about the growing ‘infrastructural entanglement’ of the EU (economic) institutions in financialization. Whereas Braun and Gabor (2020) unpacked how the ECB has ‘advocated and actively promoted, for monetary policy purposes, the development of shadow banking and shadow money’, this article extends their argument, showing that, furthermore, the Commission plays a leading role as an issuer of green bonds on behalf of the EU, deepening the EU's infrastructural entanglement with global financial markets. The financial backing to implement the EGD intersects in important ways with the EU's Covid-19 recovery fund, NGEU. At least one third of the investments from the NGEU financial package and the EU's 7-year budget (the MFF 2021–2027) have been pledged for financing the EGD (European Commission 2021). Loans from the European Investment Bank will also be mobilized. Taken together, the MFF 2021–2027 and NGEU have raised a total €2.018 trillion to implement the EU's policy priorities over the next 7 years, which is an unprecedented financial resource available at the EU level. The EU's regular long-term budget, the MFF, accounts for €1.210 trillion of the total amount and NGEU accounts for €806.9 million to supplement the regular EU budget. Furthermore, NGEU funding has been earmarked to top up the following MFF budgetary headings (in order of magnitude of the contribution): ‘Cohesion, Resilience and Values’ – €426.7 million (+ €776.5 from NGEU); ‘Natural Resources and Environment’ – €401 million (+ 18.9 from NGEU); and ‘Single Market, Innovation and Digital’ – €149.5 (+ €11.5 from NGEU). Third, the Commission now works closely with the member states and with other EU institutions, such as the ECB and EU agencies as an orchestrator in the contemporary complex polycentric system of EU economic governance. The orchestration analytical framework (Abbott et al. 2020) helps understand the new role of the Commission and the ECB in the EU's contemporary more complex system of polycentric economic governance. Orchestration is a form of indirect governance. The orchestrator works through the intermediary to influence the governance target, and it is ‘soft’ because the orchestrator often lacks authoritative control over the intermediaries and the targets in a classical principal-agent delegation sense (Abbott et al. 2020, p. 21). An orchestration approach may be desirable in contemporary EU economic governance to mitigate the effects of growing public opinion polarization and Euroscepticism, as the Commission relinquishes direct ‘control’ and seeks instead to co-create the national economic programmes together with the member state governments, allowing much more space for national discretion and national economic priorities. 1 On the one hand, the contemporary EU economic governance system is complex, polycentric and more decentralized simply because there are more relevant venues of policy-making in the multi-level EU governance system, considering also the EU's embeddedness in global governance (see also Schmidt 2023). On the other hand, complexity and polycentricity are magnified by the types of contemporary economic policy problems that the EU faces. These tend to be wicked policy problems, such as the climate crisis, that have multiple interconnected dimensions, and the solutions of one may the of solutions to policy and The Commission's interaction with the ECB is particularly important to unpack, as the ECB has taken a firm stance to support the transition to a carbon-neutral while of staying within its policy remit of keeping prices stable and banks 2022). On the one hand, inflationary pressures a challenge for citizens and businesses alike in the of 2022. On the other hand, rising bank interest rates to in inflation generated unintended consequences for balance sheets and, ultimately, for the stability of the European banking sector. Let us the tension between the economic growth policy and the low inflation policy especially from the of the Commission and the of the Union's economic and financial policies in that the Commission is more on economic especially in the implementation of the member states' green transition At a EU emphasized that the EU economy strong and growth between and and in after the Covid-19 pandemic. also stressed that ‘the fiscal stance of the past three years, with the monetary was to support the area economy we be of these and the economy’ (European Commission This is why the Commission's as part of the European the for a more fiscal but ‘the investments that are for common (European Commission the ECB has been with the of the economic growth policy and the low inflation The tension between these two policy objectives visible when we consider some of the key of the ECB during 2021 and 2022. Since the of the the ECB and the ECB have been very clear that the policy is to keep eurozone inflation below, but it was seen as a departure from the when the ECB in after a of its monetary policy that ‘it inflation the of the 2021). The ECB also it direct more its bonds to mitigate climate change p. thus globally as one of the main of bank climate in a global banking (see also 2023; 2022). For example, the ECB into climate change when one of the main to borrowing and economic as part of its economic the ECB (2021) that it that have to their carbon At the time, it is that the ECB the main decision-making has not been on how to a balance between the different policy objectives of the of the ECB are in of the new monetary and For example, of the Central has been a of ECB climate and a when the different policy objectives, such as keeping inflation in while financial stability and economic growth in the Union Bank 2023). of the Bank of France, has and member of the ECB has stressed that ‘the main banks their attention to climate change is the it will affect their to achieve their 2021). of the ECB have been more For of the between and 2021 and a member of the ECB for the ECB to its spending eurozone inflation of control and 2021). also that climate change and climate outside the remit of in three as was set to that in the in the ECB monetary policy to inflation and even the ECB policy to financial stability and the during the eurozone crisis and 2021). as inflation in the in in the ECB to from the economic growth policy to the low inflation In the raised the key ECB interest rates for the first in more than a to an to an of policy rates the ECB its interest in the eurozone interest since the global financial The ECB has to monetary policy since interest rates and its at an unprecedented to inflation towards the These actions the eurozone inflation to in but still in the ECB the so-called a to support the of monetary policy. to by the ECB the can be for of securities by eurozone member states that in financing not by to to the it is important to note that on the of the monetary policy and the amount of the is not the ECB a of discretion in the scale of the ECB a renewed on eurozone inflation in a in in 2022. that some EU such as the three states, unprecedented inflation rates to the of for example, war in Ukraine, energy chains and of that banks have to on their to their to ensure price stability will have to raise rates to that will deliver inflation in the ECB also to the low inflation policy by a to the bond and stressed that fiscal support for the eurozone economies be and This article stock of the recent policies adopted in the by two key actors in European economic and financial sector governance – the European Commission and the ECB – to advance the green transition toward a carbon neutral EU economy by 2050. that the new EU gouvernement économique of the can into larger financial means to support the green the traditional EU budget with newly set-up supranational investment funds available through NGEU. the mode of governance is polycentric and the Commission and the ECB as to the policies and actions of the member states and other EU and reconcile different policy objectives, such as economic growth and low inflation. At a on the of climate Pierre of the Bank of emphasized that climate policy an part of economic it is to public 2023). the of the Commission and the ambitious policies to advance the green transition will on in national economic policy and backing by the EU the and and the in the on of in at the of and the for their and on an earlier of this article. also to the in on of European for the and with concepts in European economic governance that we often take for

Ángel Saz‐Carranza, Martino Maggetti, Kutsal Yesilkagit, David Coen

Abstract Several recent studies have pointed to the increasing relevance of relatively informal, non-treaty-based global governance bodies (GGBs). Yet, a systematic fine-grained assessment of these bodies and their implications for global governance are still pending. To what extent, do non-treaty-based GGBs constitute a truly novel type of governance body, distinct from traditional treaty-based international organizations (IOs)? How do the distinctive features of GGBs affect their role in global governance? To what extent are GGB’s patterns of emergence and development specific to policy sectors? This article tackles these questions, drawing on an original dataset on GGBs in five distinct policy areas (banking and finance, energy, global health, Internet, and migration policy). We combine a micro-organizational perspective with a meso-level network approach to unpack the main features of non-treaty-based GGBs vis-à-vis, traditional IOs. Our results provide support to the general expectation that non-treaty-based GGBs offer distinctive opportunities for global governance with respect to traditional IOs. However, importantly, this relationship is not dichotomous. We find that GGBs exist on a continuum of fit-to-purpose designs ranging from hard, formal, and intergovernmental models to a soft, informal, and multistakeholder-based form of governance. Lastly, we also find notable variations across policy areas, where global health stands out given its decentralized network structure.

Niccolò Bertuzzi, Federica Cittadino, Giada Giacomini, Alice Meier

Climate change represents a global problem and a challenge with manifold responses, which requires coordinated action at different levels. In this context, subnational governments play a significant – yet still understudied – role in the fight against climate change; they exercise powers in policy sectors that may have an impact on climate mitigation and adaptation objectives, such as transport, energy and water, and spatial planning. The research project “Climate change integration in the multilevel governance of Italy and Austria” (Research Südtirol/Alto Adige 2019) compares the Italian and Austrian legal systems with a particular focus on how climate change policy integration (CPI) is realized in the Autonomous Province of Bolzano and Trento in Italy and Länder Tyrol and Vorarlberg in Austria. The project hypothesizes that five factors play a particularly significant role in realizing CPI, namely coordination, participation, information, leadership and funding. In this contribution, we will focus on the dimension of coordination. Also in light of the different decentralization arrangements in Italy and Austria, coordination in the study areas analysed unfolds differently concerning both the type and the employed instruments of coordination, although certain common tendencies can also be observed. Drawing from the results of the empirical research (interviews) conducted in the study areas, this article argues that coordination is affected by the federal vs regional organization of the State only when it comes to vertical coordination. Furthermore, since climate change in not a unitary policy field, improving horizontal coordination among policy fields seems to be more crucial than improving vertical coordination.

Jarle Trondal, Stefan Gänzle, Benjamin Leruth

2021 marked the official start of a post-Brexit era for the European Union (EU) since the United Kingdom (UK) had only fully withdrawn when the transition period lapsed on 31 December 2020. The transition period prevented the EU and the UK from falling off a cliff before a mutual Trade and Cooperation Agreement (TCA) was to be ratified and implemented into UK law by Parliament before 1 January 2021. This cumbersome process marked the pinnacle of a three-decades long period of European integration which saw the political architecture of the EU gradually shift from a system characterized by integration to one that is more succinctly marked by differentiation. Using Brexit and the Covid-19 pandemic as cases in point, we argue that differentiation has become the system property of the EU's institutional polyarchic architecture. While differentiation has sometimes been conceived as being mostly temporary in nature, we may think of a differentiation of the EU's political order as a permanent and systemic property. Differentiation is both an empirical and a theoretical phenomenon. Empirically, it has been on the rise ever since the ratification of the Maastricht Treaty in 1992. As Euroscepticism progressively became more mainstream, disintegrative tendencies feature more prominently in Europe's political order (Bátora and Fossum, 2020; Gänzle et al., 2020). Membership withdrawals or centrifugal moves away from the EU, such as Brexit or Switzerland calling off negotiations on a partnership agreement in 2021, have therefore been coined conceptually as differentiated disintegration (Schimmelfennig, 2018). Similarly, reverse processes of ‘de-differentiation’, such as the Danish people's decision in May 2022 to revert the former opt-out in EU defence (Politico, 2022), have occurred, too. Prior to the landmark process of Brexit, European integration generally followed the ‘ever closer union’ model – as famously stated in the preamble to the Treaty of Rome of 1957. Even so, European integration was never truly uniform but shaped by mechanisms of differentiated integration (Leuffen et al., 2022). In addition to policy-centred vertical differentiation (that is, the variation in the level of centralization across policies), such as most prominently in Economic and Monetary Union (EMU), the EU has encountered various forms of horizontal differentiation. This includes an internal dimension with EU countries opting out from certain policies both de jure and de facto (Hofelich, 2022), as exemplified by Denmark and Sweden's non-adoption of the common currency as well as an external dimension with non-EU countries, such as Norway and Switzerland, opting into selected policies (Leuffen et al., 2022). Today, the EU can therefore be considered as an institutionally polyarchic architecture of concentric circles with a core of club members surrounded by countries that have managed to negotiate opt-outs from specific policy areas; countries willing to join; and various neighbourhood agreements involving both European and non-European countries (for example, Gstöhl and Lannon, 2018). Studies of European differentiation have underlined that it is paramount to conceive of differentiation as a comprehensive phenomenon that is not tied to specific directions of either integration or disintegration (Gänzle et al., 2020; Leruth et al., 2022; Olsen, 2007). Yet, while differentiation was initially considered as a temporary phenomenon (through the concept of ‘multi-speed Europe’), we nowadays witness the emergence of permanent forms of differentiated political order(s) within the EU, for instance through the form of opt-outs from the Eurozone. This study suggests that forms of macro-level differentiated political order in the EU may lead to transformations at the meso-level, which in turn may affect the institutional robustness of the EU. Ultimately, differentiation may serve as a vehicle for the long-term sustainability and institutional robustness of the EU. This argument is supported by studies showing that the survival of international organizations (IOs) is associated with the size of their executive capacity (Debre and Dijkstra, 2020). This also suggests how institutional features of IOs may assume a paramount role of robust global governance. It is also necessary to emphasize the attractiveness of studying the robustness of a differentiated European political system in turbulent times (Ansell et al., 2017). Clearly, the robustness of institutions may be taken for granted during periods of stability (Olsen, 2007). During periods of turbulence or crisis, however, established institutions may become subject to contestation, requests for reform, and objects of scholarly studies. Rather than leading to fragmentation and dissolution of institutions, we maintain that manifestations of differentiation foster resilience of the political order of the EU. After a concise conceptualization of differentiation, we examine how the EU has dealt with both internal and external differentiation at the meso-level using Brexit and Covid-19 as cases in point. Second, in our view, differentiation is and will continue to be prominent in the years to come, hence we sketch out an institutionalist research agenda which suggests how macro-level differentiation – for example, with respect to polity-level differentiation – may lead to meso-level institutional responses. Finally, we close by discussing implications for the post-Brexit and post-pandemic future of differentiation. As a strategy of integration, the roots of differentiation can be traced back to a report produced under the direction of Leo Tindemans (1975), which laid the conceptual foundations of a ‘multi-speed Europe’ (Stubb, 1996). Yet, scholarly debates on differentiated integration only started in the early 1990s – against the backdrop of the legally enshrined British and Danish opt-outs in terms of currency union and defence for example. With subsequent discussions on further constitutionalizing forms of differentiated integration, the enhanced cooperation mechanism was introduced in the Treaty of Amsterdam. Considering these developments, Stubb (1996, p. 283) defined differentiated integration as ‘the general mode of integration strategies which try to reconcile heterogeneity within the European Union’ in terms of time, space, and matter. From a theoretical perspective, other scholars also focused on the scope and limits of differentiated integration in the EU (for example, de Neve, 2007; Holzinger and Schimmelfennig, 2012; Leruth and Lord, 2015; Schimmelfennig et al., 2015; Sitter and Andersen, 2006). The financial and economic turmoil of 2007–2008, subsequently followed by socio-economic and political unrests of many kinds, brought the EU into a new multi-faceted poly-crisis (Riddervold et al., 2021). The future of European integration became increasingly questioned, as domestic Eurosceptic actors pushed for reducing the scope of core EU powers, opt-outs or even withdrawing from the Union as a whole. Brexit eventually opened a new chapter in the study of differentiation (Leruth et al., 2019). Some of the recent literature on crisis, disintegration and differentiation in Europe also combines explanations based on collective actors' cost–benefit calculations – such as the promotion of equality of opportunity among EU members (Jones, 2018) and institutionalist explanations focusing on how crises are channeled through and mediated by pre-existing institutional frameworks and resources (for example, Bátora and Fossum, 2020). Brexit thus largely reinvigorated differentiation as a central focus of research in EU studies. In contrast to previous iterations of differentiation – which were exclusively used to qualify forms and grades of integration – the term has now come to be applied in instances of both integration and disintegration. Both growth and reduction of the level, scope and membership of IOs remain unequal and therefore differentiated. Differentiation applies to the institutional, policy and territorial dimensions of such processes. With regards to the institutional dimension, differentiation is relevant for grasping the settlement of both emergent organizations and organized systems. Institutions and organized systems are temporary sets of rules and procedures, demography, locations, beliefs and norms. Different approaches to differentiation are particularly helpful in conceptualizing the settlement of emergent political orders such as the EU that involve multiple tiers of authoritative decision-making. The EU has been depicted in a two-pronged way both as ‘a conceptual battleground and an institutional building site’ (Olsen, 2010, p. 81) with a varied mix of organizational forms, governance patterns and ideas about legitimate forms and speeds of integration. Institutional differentiation was eventually understood as ‘new institutional spheres [that] have split off from older ones and developed their own identities’ (Olsen, 2010, p. 142). From an institutional theory perspective, differentiation ultimately ensures a form of interdependence that ties institutional spheres together. In such a highly dynamic process of institutionalization, de-institutionalization and re-institutionalization, European integration is constantly being reconfigured. Varieties of organizational structures and institutional norms in the EU contribute to institutional change within EU member states. It has been observed that both intergovernmental, supranational as well as non-majoritarian institutions tend to encourage patterns of institutional differentiation. Egeberg and Trondal (2017) demonstrate that EU agencies have become vehicles for integrating regulatory bodies also from non-EU member states. In addition, they document an acceleration in the creation of new decentralized agencies over time not only in terms of numbers but also in terms of powers and quality. The ‘agencification’ of both EU (non)member-states and the EU administrations serve as an institutional infrastructure for differentiated administrative integration (Trondal, 2014) through a differentiated inclusion of administrative bodies from member and non-member states in EU governance. Central agencies in Switzerland, EEA/EFTA countries, candidate and neighbouring countries are offered access to EU decentralized agencies' management boards, leading the latter to become privileged fora for external differentiated integration (Lavenex, 2022). During the Covid-19 pandemic, EEA countries coordinated their response strategies with the European Centre for Disease Prevention and Control (ECDC). Since agency officials generally enjoy a considerable degree of independence from their states' central administration, and that their involvement in EU networks is thus relatively insulated from political intervention form their governments, they are highly sensitive to governance processes at different levels of government (Egeberg and Trondal, 2009). The result is a differentiated and semi-autonomous polycentric patchwork of memberships and associations in EU administrative networks. In March 2020, the global Covid-19 pandemic eventually hit Europe; it affected most policy domains of the EU and substantially put solidarity amongst member states to a test. Although the EU has only limited competence on public health, which remains largely under the control of member states (European Court of Auditors, 2021), the EU was criticized for its lack of coordination, for not acting immediately concerning medical equipment for Italy and not reintroducing internal borders (Wolff and Ladi, 2020). The EU's immediate health policy responses mostly rested on the use of pre-existing resources and institutions: the ECDC, the health emergencies system, the Joint Procurement Program (JPP) and the RescEU civil protection mechanism. The initial EU response to the crisis was differentiated partly because the ECDC was dwarfed by the many national agencies it was supposed to coordinate, the lack of an independent budget line, and its sole support by an administrative agency with no independent legal basis (Consumers, Health, Agriculture and Food Executive Agency, CHAFEA). As a result, member states responded quite differently to the crisis, largely reflecting different government systems, governance traditions, policy styles, attention structures and pre-existing crisis routines within each country (Askim and Bergström, 2021; Zahariadis et al., 2021). On the issue of fiscal support to struggling EU member states, an existing political division lingering from the Eurozone crisis between so-called ‘frugal’ Northern countries and the Southern member states reemerged, yet with one crucial difference: Germany appeared to have changed its stance on the matter (Schulz and Henökl, 2020). This resulted in the approval of the unprecedented €750 billion NextGeneration EU recovery plan. With a view to violations of the rule of law in Poland and Hungary, the recovery plan included access clauses tied to the fundamental principles of the EU via the Rule of Law Conditionality Regulation, which acted as preventative mechanisms against further democratic backsliding in both countries, thereby implying that differentiation cannot be applied when it comes to these core values. Legal challenges were unsuccessfully launched by the governments of both countries, yet there were still major concerns over the inaction of European institutions to tackle democratic backsliding in Poland and Hungary. However, the Commission's decision to endorse Poland's recovery and resilience plan in June 2022 was met with strong skepticism, given the government's refusal to loosen control over the judicial system (The Guardian, 2022). Existing patterns of territorial differentiation led to institutional differentiation among national health agencies. Health agencies in Norway and Sweden, for example, activated different strategies first to combat the virus nationally and second in their adoption of advice and services from the ECDC. Contrary to the general observation of tight agency networks among the Nordic countries (Schrama et al., 2020; Stie and Trondal, 2020), the Norwegian and the Swedish health agencies adopted opposite strategies in both regards, for example regarding the implementation of lockdowns and with regards to their referral to the ECDC. Reflecting different domestic institutional designs and past choices, the Norwegian and Swedish governments differed in how they framed and managed the crisis – as a healthcare crisis (in Norway) and a public health crisis (in Sweden; Askim and Bergström, 2021). This observation moreover reflected general patterns of EU differentiation, in which administrative differentiation of the EU contributed to provide institutional architectures for meso-level differentiation (Leruth et al., 2022). One effect was that a non-EU member state (Norway) coordinated Covid-19 responses vis-à-vis the EU more extensively than an EU member state (Sweden). Subsequent internal differentiation occurred once vaccines were deemed safe by peer-reviewed studies: as the EU and the European Medicines Agency were criticized for initially slow-paced decisions to approve vaccines and organizing an effective rollout program, some countries such as Hungary and Slovakia relied on non-European Medicines Agency-approved vaccines such as the Russian Sputnik V (Politico, 2021). Brexit is a second illustrative case providing on how administrative networks in the EU resources for meso-level institutional differentiation. polity-level transformations as with the produced by Brexit, actors their in EU administrative while at the time some variation to institutional and 2021). The scope of meso-level in terms of policy differentiation in the way the post-Brexit EU policy Although the has not yet produced disintegration in one of the most of UK public policy et al., 2022), the institutional and the new agreement (for example, access to and of a strong degree of regulatory and institutional This may even for the to more to the EU in the may be In the process of Brexit has the independence agenda in and the to long-term of the EU may provide further for the and other to for further The implementation of the on has on the agenda in 2021. the of the and thereby a on the of the further in the implementation of the in the of and health, and with Northern on 2021. while Brexit an unprecedented process of differentiated disintegration in the European it also the of the United Kingdom that lead to its own disintegration. In the UK on the with the EU, which further lead to between both and have at the both from the empirical and the of differentiation as a system property of the EU, we that there is a research agenda on differentiation that may be is a general of literature on institutional capacity which to how institutions and systems to and and which may studies of differentiation in the EU et al., 2020; 2021). Studies also provide on how different institutional institutions to to change (for example, and Although institutional are a conceived of as to organizational change and et al., et al., p. institutional theory may be used as a theory of differentiated governance responses. an institutional EU to the of European not with how but how be 2010, p. certain such as institutional resilience and robustness of the EU, be of The role of organizations and organizational however, is in the that institutional has largely the study of long-term and (for example, we as a to differentiation that for March and Olsen, March and famously that long-term of tend to be characterized by to in which tend to be applied to new to a in with an and as in they have not Yet, and of the EU and its institutional system, as with most institutions and is by many the of existing organizational institutional and and limited capacity to and a of previous that at time (for example, sometimes are sometimes characterized by the of that have taken and Olsen, p. or that processes involve and based on of and Olsen, The long-term of differentiated political such as the EU, has been observed to into (Bátora and Fossum, 2020). It thus be that the of a differentiated EU political order is not as a result of processes but subject to the of an institutional not that a political order in an and of the EU, each of which is may be by and may to form a of that therefore on intervention and change through the of organizational an institutional how decision processes and to a of organizational routines that may be and for are past in rules and in the organizational of a government (Olsen, 2017). are thus to and differentiation, some organizational more than – for example, – the organizational structures of the EU, the attention or the architecture of EU is also This that polity-level (that is, the macro-level of the are to the of to actors at the level of institutions (that is, the meso-level of EU institutions and organizational is on the that organizational may how institutions such as the EU and It that organizational are not an of and but in and processes by and and attention certain and certain more than and 2009). are given for it has been that the and effect of on and on studies of the European (for example, and Egeberg and Trondal, Trondal, 2006). Second, to other that in the policy is more subject to change and may thus be an (Egeberg and Trondal, and 2009). organizational therefore from the of EU thus conceive of as a which that of differentiation may be institutionally This implications that may be for in the EU. It may for example be that the institutional of a the of institutional at for institutional of the EU as a differentiated and we argue that the polity-level robustness of the EU is associated with of meso-level institutional differentiation, for instance among EU agencies and administrative networks In other the growth of EU agencies over time has the EU's internal robustness and opportunity to both member and countries in terms of administrative governance. has that the EU has in the of past such as and Brexit, by through established institutions, and Differentiation may as a for the Union to through While the of differentiation has been used and across these cases demonstrate p. quite most and even is not in with The years may the to which differentiation eventually to further the EU in the of future crises continue to a process a differentiated or are we to witness that may the process an The in initially discussions over the creation of new such as political which of a the of political a new dimension to debates over the of differentiation in the time, the Russian in since has a process of in as the Danish in of the defence opt-out in a on 1 June studies on differentiation examine mechanisms that may the emergence of and of differentiation. In we on studies to how differentiated EU for and crisis management et have established that crisis governance in the and within certain policy domains may long-term institutional long-term implications of crisis governance calling for further scholarly across policy and time as well as challenges to the EU's democratic crisis management tend to have that is as observed in the Covid-19 crisis that within one policy – such as public health – may in other policy or across systems 2021). the EU's crisis responses may have long-term and democratic implications and in when the EU to crisis through differentiated institutional and policy the EU's democratic may in the long since crisis responses tend to executive institutions and contribute to the of government decision This central institutions and institutions in processes are from crisis responses and at EU level may therefore a systemic executive and with long-term challenges not met with the support of and et al., 2021).

Kashif Azam

There is a distinct lack of democratic governance in our contemporary era.In this paper I develop a mechanism to overcome this democratic deficit.'The Cryptostate' is an amalgamation of primordial democratic theory and recent technological advancements.By combining democratic principles with distributed ledger technology, we can create a decentralized, transparent, governance framework in which various groups-societies, ethnicities, or nations-can communicate, coordinate, and enfranchise all affected members.Never before in human history has it been technologically feasible to create such an entity.In this article, I demonstrate that not only can such a state exist, but that in the face of our ongoing technological and global upheaval, it must.

Yeşeren ELİÇİN

France undergoes a decentralization process since the early 1980s. French local administrations experienced significant transformations during this process, embracing three action periods. The decentralization acts enacted in 1982 mark disengagement with administrative uniformity. The second period of decentralization starting the first years of 2000s witnessed important constitutional modifications. Regional administrations gained Constitutional recognition, local referendum has been established, the amendments concerning right to petition, experimentation, local finance and local autonomy has been passed. The third phase of decentralization started since 2010s. The reorganization of metropolitan governance, the transfer of competence to inter-communal cooperation structures concerning urban planification, roles assigned to regions in economic development and employment (economical issues, apprenticeship, European aides and aides destined to private sector), territorial solidarity and reinforcement of democracy were the main themes of this phase. The present article tries to analyze the foremost futures of French decentralization and to underline the main discussions emerged during the ongoing third phase of decentralization process concerning future of departments, regional administration and newly created metropolitan cities. In the last part of the article, the probable influences of French reforms on Turkey are discussed taking into account that Turkey has taken this country as a model in its administrative organization.

Agustín José Menèndez

One thing is certain about Brexit: The allegedly ‘unpredictable’ outcome of the referendum has fed a new scholarly fad. ‘Instant’ working papers, instant special issues, even instant books have already been written, dealing with the backstage of the Brexit campaign, the ‘causes’ of the popular ‘revolt’ and the plots and counterplots in the corridors of power and the antechambers of spin doctors. The supply of futurologist analyses of the consequences of Brexit to the (dis)United Kingdom are also in strong supply. The paradox of Brexit as a ‘pop-out’ academic industry is that most of the enthusiastic academic entrepreneurs that have built the field implicitly endorse the perspective of most radical Brexiteers by focusing almost exclusively on the British side of the affair. As if Brexit was an entirely British issue, as if the state of the European Union did not influence the outcome, as if the United Kingdom leaving the European Union was not bound to affect the European Union too. Listening to some of the debates, one might be forgiven for entertaining the thought that Brexit is even more paradoxical than the unwritten but very written British Constitution, given that it boils down to the divorce of a polity that remained rather unengaged all these years. Thus, it is not far-fetched to conclude that Brexit requires scholarly analysis that tackles the structural causes and the structural implications of a momentous decision for both the United Kingdom and the European Union. Majone's sober and balanced piece provides a much needed counterpoint to the mass of on-the-hoof analysis. Instead of focusing on the short-term vagaries of electoral politics, or divining the outcomes of the ongoing bargaining games, Majone sets Brexit in its long-term context, showing the extent to which it is a further (and still very important) symptom of the structural crises the European Union is going through. Perhaps even more importantly, Majone renews his plea for thinking European integration along very different lines from the ones favoured by mainstream EU studies, namely as a concentric set of functional ‘unions’, capable of complementing the capacities of Member States without eroding the basis of their democratic legitimacy. Both Majone's diagnosis and prognosis are bound to be highly polemical, in the best ELJ tradition. The European Central Bank (ECB) has gained major new formal competences and substantive powers as a result of the many transformations triggered by the manifold European crises. This more than justifies reconsidering the foundations of the legitimacy of the ECB, and more specifically, how the said legitimacy depends on the institutional setup and procedures that ensure the ECB acts in a transparent fashion and remains accountable to supranational and national representative institutions. This is precisely what Curtin invites us to do in her contribution. The accrual of new powers to the ECB, both through explicit changes in the law, and perhaps even more so, due to emerging conventions among European and national institutions, requires that we reconsider the legitimacy equation of the ECB, that we not only test both the accountability and the transparency of the ECB, but also, and perhaps above all, the relationship(s) between the two. Curtin cautiously leans towards (on-the-alert) scepticism. There is no doubt that the ECB has become more active in presenting itself as a transparent institution, and has indeed devised and deployed a ‘communication’ strategy. Still, ‘managed’ transparency is hardly conducive to the kind of accountability that can be demanded from any public institution, no matter how capable of mobilising expert knowledge. To put it differently, unilateral ‘communication’ initiatives cannot by themselves guarantee legitimacy, because there is always the risk that, without further checks and balances, they become clever legitimising ploys. But checks and balances are few and far between. The powers not only of national parliaments but also of the European Parliament are limited to engaging with the ECB in a ‘monetary dialogue’ largely steered by the ECB itself. By the same token, members of the public (individuals, organisations and media) can only have access to ECB documents if and when the ECB finds it appropriate to release them. The different polemics around Trichet's penchant for writing letters prove the point rather abundantly. That the ECB has stonewalled when required by national parliaments to release letters that were of essence in reconstructing the causal chain leading to the request for financial assistance by the Irish state, the ‘express’ amendment of the Spanish Constitution in 2011 or a rather particular change of government in Italy at the end of that same year is not exactly reassuring. I come back briefly at the end of this editorial to the issue. Byberg adds a very important new block to the edifice of the emerging history of European law as a scholarly discipline. Her article breaks the promising ground of research into the history of law journals by offering us the key elements of the history of the Common Market Law Review, the leading (black-letter) journal on European law. Relying on the archives of the journal itself and on interviews with the ‘founding fathers’ of the journal (no founding mothers, quite revealingly), Byberg paints a vivid fresco, which is at the same time a reminder of the fragility and resilience of scholarly journals, of the twists and turns through which scholarly fields are established and defined, and of the complex relationship between EU scholars and the EU as a polity and power centre. Byberg's historian's knack for combining the big and the small picture results in a contribution that throws light on the coming of age of EU law by means of focusing on the details. While the disciplinary lenses are rather different ones, McRea's piece is also one that makes use of history to throw light on the present European Union. It seems to me that McRea touches one of the raw nerves of European integration: its militant ‘telos’ so punchily summarised by the motto ever closer Union. McRea notes that the phrase is not only a clever rhetorical trick, but has become over time part and parcel of the constitutional (un)conscious of the European Union, to the point that the coherence of the present setup of the European Union is dependent on the expectation, almost certainty, that further powers will be centralised, further policies will be developed, and further resources will be managed by supranational institutions. But what if the promissory note cannot redeemed? Then, as we may be learning the hard way in the last two decades, a half-full glass may not only be a half-empty glass, but also a rapidly depleting half-empty glass. What yesteryear were regarded as the embryo of further institutional structures or policies are revealing themselves to be inconsistent institutional setups (viz. the Eurogroup) or policies (EMU), too rigid to make the complex (‘half-made’) Union work. McRea's key message may be that good bicycles are those capable of standing even if the cyclist is not pedalling furiously. Nicolosi provides a carefully crafted analysis of the right to asylum in European constitutional law, and in particular, of Article 18 of the Charter of Fundamental Rights. This article, even if crystallising the constitutional traditions common to the Member States and the practice around the European Convention of Human Rights, can be fairly said to have given a further impulse to the formal commitment of European states to the right to asylum. But the proof of the cake is always in the eating, something that can perhaps be translated into legalese by reminding ourselves that where there is no remedy, there is no right. Nicolosi stresses the extent to which the substantive content of the right to asylum relies on the close connection between the right to asylum and the right not to be expelled when in danger (a right which fittingly given its origins is referred as non refoulement), and should have a decisive normative horizontal effect on the interpretation of the whole set of European migration norms, including the (in)famous Dublin rules (subject to detailed analysis in recent issues of this journal) and the (even more in)famous EU–Turkey ‘statement’ (or in plain English, agreement between the EU and Turkey on the refugee crisis, which has also been critically reviewed in these pages). Joerges and Kreuder-Sonnen offer a panoramic analysis of the evolution of EU studies in the last decade, a period marked by the many, overlapping and mutually reinforcing crises that have pushed off balance the European Union. The core thesis of the article is that both political scientists and lawyers have turned a blind eye to the structural challenges that underlie the crises. It is not only that EU studies were slow in coming to terms with the crises, but also that the crises have been downplayed by EU scholars by means of divorcing the analysis of the transformation of the European Union and of European law from the normative implications of the mutating and mutated Europe. Political scientists have approached massive changes in the institutional setup of the Union, the governance architecture of European Monetary Union or public attitudes towards integration as if they did not have far-reaching constitutional and normative implications. This worrying blindness to normative implications is the price that has been paid to keep on using the conceptual and analytical grid of neo-functionalism, liberal intergovernmentalism and historical institutionalism (of pretending, in short, that it was possible to do business as usual). By the same token, legal scholarship has closed its eyes to the rather obvious birthmarks of the whole set of legal norms produced in the name of containing and overcoming the crises (‘crisis law’) by means of radicalising the normative asepsis of the constitutional theories that mainstream EU legal scholarship has cultivated in the last three decades: treaty constitutionalism, economic constitutionalism, functional constitutionalism. Joerges and Kreuder-Sonnen note, however, that the critical fringes are gaining traction: not only we can see new politico-scientific paradigms and constitutional theories coming to the fore, but also the emergence of critical voices within established paradigms denouncing the divorce of facts and norms. It is perhaps this mixture between the old and the new that authors find congenial to their approach, which perhaps can be summarised by Hume's dictum: ‘If false, let [these] arguments [be] rejected: But no one ought to entertain a prejudice against them, merely because they are out of the common road’. The issue has an ‘extra track’ in the form of an analysis of the possible causes and likely implications of the decision of the Danish Supreme Court in the Anjo case. Non-discrimination on the basis of age has proven again to be a minefield when it comes to the relationship between European legal orders. On its surface, Anjo can be said to be a replay of Mangold. Perhaps reassured by the déjà vu traits of the case, the European Court of Justice failed to notice that when the Danish Supreme Court sent it a preliminary question before deciding the case, this was far from a routine preliminary question. Luxembourg judges failed to realise the hand they were being asked to play, and limited themselves to instruct Danish Courts to solve the conflict between what EU law seemed to require (rendering effective, even among private parties, the principle of non-discrimination on the basis of age) and the legal solution the Danish Court reputed stemmed from Danish law (not rendering the principle effective, in particular on the basis of the clear and well-established interpretation of the relevant pieces of law by the Supreme Court itself militating against) by interpreting Danish law in line with what EU law required. Indeed, Advocate General Bot seemed to suggest that it sufficed the Supreme Court to change its own construction of Danish law. But that was precisely what the Danish Court was resolved not to do. As Madsen, Olsen and Šadl point out, that was not only a bridge too far, but also a move coming too late in the jurisprudential (and perhaps social and political) game. While the Danish Supreme Court had a long track record of being ready to be as pragmatic as needed to avoid conflicts between EU law and Danish law, things had changed by the end of 2016. Not only had the very composition of the Supreme Danish Court changed, but the socio-economic environment had rapidly evolved (as perhaps attentive readers of newspapers could have noticed). There were indeed clear signals of the new spirit of the age in the last big ruling of the Danish Court on European matters of 2013. Anjo may perhaps come to be regarded as an isolated instance of unease. Still, Madsen, Olsen and Šadl remind us that the stance of the Danish Supreme Court could also set the tone for further developments in other European countries. For the times they are achanging. And perhaps the CJEU judges should occasionally read the biographies of, say, Alf Ross. A final coda. Curtin's article engages with fundamental theoretical questions which have immediate and very visible practical implications. Consider, for example, access to ECB documents, and more precisely, access to the legal opinions on the basis of which the growing powers of the ECB are exerted. Whether these legal opinions are produced by the legal service of the ECB (‘in-house’), or commissioned to ‘external’ jurists, the fact of the matter is that it is consolidated institutional practice to be extremely selective in their publication. The rule of thumb is indeed that the opinions, very especially if dealing with ‘sensitive’ issues (and which issues decided by the ECB are not sensitive?), are covered by a veil of secrecy. This is the case for the ECB, but is also the institutional practice of the other European institutions. In the early days of European integration, it was not fully implausible (even if at the end of the day hardly persuasive) to claim that the very ‘international’ character of the Communities rendered advisable sheltering the legal services from too close a public scrutiny, which could perhaps undermine the forging of a genuinely supranational vision, hardly to be expected to emerge if there was constant blaming and shaming of legal opinions and institutional lawyers along national lines. However, such line of reasoning cannot be even tried if the said legal services promote a ‘constitutional’ reading of European law (as Byberg's article reminds us, the ‘constitutional turn’ in the interpretation of EU law is part and parcel of the very identity of European law as a discipline). If indeed European law is worthy of being constructed in a constitutional key, then the publicity of legal opinions should also be approached from a constitutional perspective, which would require publicity, not confidentiality. The alternative argument according to which the legal opinions of the legal services of the institutions are protected by the ‘attorney-client’ privilege is just a poor substitute of the original rationale of secrecy. Leaving aside the fact that no public institution can be regarded as an ‘ordinary client’, it is to be expected, and indeed desired, that legal advice offered to public institutions be provided with the expectation that it will be made public at the end of the day. Citizens have a collective interest in advice being so provided as to stand the test of being rendered public. Not only political decision-making in a democratic state should be based on public, not private reasons; but those providing legal advice to public institutions should not be given the impression that they are advising those holding public office in personam. It is one thing to be the lawyer of the ECB; another to be the lawyer of the President of the ECB. The only effective way of keeping the proper distinctions in place is for the general rule to be that legal opinions are always rendered public. Certainly, there can be good reasons to delay publication: the public good is occasionally served by not revealing what state institutions are going to do long before they do it. In other words, it would be unwise to reveal the legal and policy hand of institutions if doing so would by definition undermine the very effectiveness of the decisions envisaged. But that only provides a justification for delaying publication (and only within reasonable time limits), not for keeping legal advice to public institutions eternally secret (or secret for 50 years, which is almost the same). It is indeed standard practice in democratic states to render public all the legal opinions provided to public institutions. Why should the European Union not do the same? 1 In the coming months this question may well be widely discussed as a result of the legal proceedings launched by the former Greek Chancellor of the Exchequer, 2 Yannis Varoufakis, with the aim of rendering public the legal opinions it seems the ECB commissioned 3 before taking some of its more fateful decisions ever. On 4 February 2015, the ECB reverted the policy it had followed since the beginning of the Greek fiscal crisis, and established that Greek debt did not constitute good enough collateral with a view to getting access to standard ECB liquidity. This implied that Greek banks were forced to rely on ‘last resort’ liquidity through the so-called Emergency Liquidity Assistance (as discussed by Tuori in his article in the previous issue of this journal). Such assistance is not only more expensive, but is not provided by the ECB, but by the relevant national central bank, but still under the tight supervision and control of the ECB. Formally speaking, the decision was justified on the basis that it was no longer certain that a new programme of financial assistance between Greece and the Eurozone would be concluded in the immediate future, and that rendered Greek public debt ineligible as collateral. In substantive terms, however, the decision came literally days after a new Greek government had come into office, and with weeks to run of the extended programme of financial assistance to Greece. This rendered the decision problematic on two accounts. Firstly, was the decision in line with the very practice of the ECB since 2010? Was it reasonable to regard now Greek public debt as too risky when it had not been deemed so before, even at times at which uncertainty over the developments in Greece were equally or even more intense? Secondly, did the ECB need to take the decision at that point in time or should it have waited? If the decision had not been taken once elections have been called for, why take it when a new government had just come into office? The second ECB decision was taken on 28 June 2015, perhaps at the apex of the third episode of the Greek fiscal crisis, during the fateful referendum campaign of late June and early July 2015. By then, Greek banks had been relying on the emergency liquidity assistance provided by the Greek Central Bank for months. As noted, the ECB did not provide liquidity, but exerted tight control over the terms according to which it was provided. There were no clear formal rules on how the ECB should decide. It would perhaps not be far-fetched to add that the ECB seemed to prefer avoiding pre-committing itself to any set of ex ante rules or guidelines, preferring ‘point to point’ refinancing, if one is allowed a nautical metaphor. 4 Quite predictably, this resulted in the liquidity needs of Greek banks being ever bigger, as they haemorrhaged deposits (the better-off making use of free movement of capital to place their money elsewhere, the middle classes and the worse-off withdrawing their pennies and placing them under their mattresses). While the ECB had been increasing the liquidity ceiling on 28 June it decided to it. This the Greek state with no other than a and not only free movement of but also that the ECB could not but the consequences of its and that the had not changed on 28 was the ECB justified in taking such a Indeed, again in view of the was the ECB in constitutional terms, to take such a The former Greek Chancellor of the is of the view that the legal opinions commissioned by the ECB before taking these two decisions should be because they can throw light not only on the issues at but also on the decision-making of the ECB. The ECB has to release the opinions, the arguments and it seems special to the need to the ‘attorney-client’ It seems to me it is of essence to keep and the one may entertain on the substantive of the decisions taken by the ECB and the question the legal opinions should be a picture of what during the months of late and early 2015, as the third episode of the Greek fiscal cannot but be in the public Greek to very especially those have most as a But that is not merely a Greek European have an interest in the of not only what was but also why it was of the legal is what the publication of the opinions will reveal to and of the economic and political of the decisions taken by all European institutions, but by the ECB. it is hard to avoid the that a constitutional would be allowed to the power of and of the ECB over the financial institutions of the That is the of the of the ECB something to which the Advocate General in the Monetary ruling came close as Joerges and Kreuder-Sonnen remind us in their contribution to this issue. In other two after the and with the issues at long the public interest cannot be on keeping the opinions but on them. This case could indeed into a decisive to the veil of that legal opinions in EU law once and for Citizens have a right to the including the legal on the basis of which they are This is not the case if access to decisive legal opinions is in the name of arguments out of place in a democratic and the very constitutional which is said to the practice of European institutions. to the legal opinions of the ECB on liquidity assistance to Greek but indeed all opinions of the legal services of and would be a at the national Why is not at the European

Mark E. Sobel

Key points The year 2014 witnessed the advent of new and strengthened collective action clauses (CACs) in foreign law sovereign bonds. These new clauses hold the promise to significantly strengthen the orderliness and predictability of the contractual market-based framework for the sovereign debt-restructuring process. This article looks at how these new CACs came about. The new CACs were borne from a process undertaken by an informal ‘Sovereign Debt Roundtable’ grouping that was convened, chaired and strategically led by US Treasury staff over more than one-and-a-half years. The inclusiveness of the Roundtable, the deliberative process, which was followed and the leadership and backing of the official community were integral to bringing about the private sector and success. The Roundtable’s deliberations built heavily upon earlier Treasury work to advance CACs, in particular during the 2002–2004 period. But the new clauses go further than the bond-by-bond clauses that were the focus from 2002 to 2004, as they allow in certain defined conditions the votes of different bond issues to be aggregated into a single up or down vote on the issuers’ restructuring proposal. In this regard, the new clauses reflect the continuity in the US approach under the Bush and Obama Administrations to promoting an orderly and predictable sovereign debt-restructuring process based upon the contractual framework, in addition to US opposition to statutory approaches. But they also represent innovation under the Obama Administration in advancing and buttressing the US approach. … in order to strengthen the orderliness and predictability of the sovereign debt restructuring process, we welcome the international work on strengthened collective action and pari passu clauses. We call for their inclusion in international sovereign bonds and encourage the international community and private sector to actively promote their use. G20 Leaders’ Communique; Brisbane, Australia; 16 November 2014 We welcome Mexico’s leadership with its successful issuance of a bond with new and innovative collective actions clauses under New York law. These new clauses will strengthen the sovereign debt restructuring process, and we encourage other nations to follow suit. Secretary of the Treasury Jacob Lew, 19 November 2014 We look forward to upcoming discussions around the International Capital Market Association’s (ICMA) proposal on possible means to reinforce collective action clauses in sovereign bonds… G20 Finance Ministers; Cairns, Australia; 21 September 2014 … ICMA recently published revised collective action clauses for sovereign debt that permit more orderly workouts and lower the chance of spillovers. These clauses … now allow for aggregation across many different debt issues, avoiding the need to vote on each loan one by one. John B. Taylor, Wall Street Journal, 9 July 2015 The late autumn of 2014 witnessed the advent of new and strengthened collective action clauses (CACs) in foreign law sovereign bonds. These new clauses hold the promise to significantly strengthen the orderliness and predictability of the contractual market-based framework for the sovereign debt-restructuring process. They were born from a process that was convened, chaired and strategically led by Treasury staff over more than one to one-and-a-half years. 1 The group working on the new clauses included issuing country representatives, inter alia from Mexico, Uruguay, Brazil and Turkey; leading UK and US sovereign debt legal experts; an array of market participants and academics; other official actors, including from France, the UK and Germany; and the IMF. In particular, this informal ‘Sovereign Debt Roundtable’ grouping also included Mexico’s debt manager and representatives from the London-based International Capital Markets Association (ICMA), an association representing some 500 firms from the international financial community, among others. The inclusiveness of the Roundtable, the deliberative process, which was followed and the leadership and backing of the official community were integral to bringing along the private sector and success. The Roundtable’s deliberations built heavily upon earlier Treasury work to advance CACs, in particular during the 2002–2004 period. But the new clauses go further than the bond-by-bond clauses that were the focus from 2002 to 2004, as they allow, in certain defined conditions, the votes of different bond issuers to be aggregated into a single up or down vote on the issuers’ restructuring proposal. In this regard, the new clauses reflect the continuity in the US approach under the Bush and Obama Administrations to promoting an orderly and predictable sovereign debt-restructuring process based upon the contractual framework, in addition to US opposition to statutory approaches. But they also represent innovation under the Obama Administration in advancing and buttressing the US approach. The US Treasury, in a speech by the then Under Secretary John B Taylor, outlined its support for the decentralized, market-oriented contractual approach to sovereign debt restructuring in 2002. 2 Around that time, a G-10 working group, chaired by Randal K Quarles, then Assistant Secretary of the Treasury for International Affairs, and including leading sovereign debt lawyers, began work on developing CACs for inclusion in foreign law sovereign bonds. 3 In 2003, building on the ‘Quarles Report’, Mexico launched the first CACs pursuant to New York law. Mexico’s issuance solved the first mover problem, there was no observable pricing impact, and CACs overnight became the norm in the New York market. 4 Importantly, though, the CACs applied only to each individual bond. During this period, the IMF advocated a statutory approach to sovereign debt restructuring. The Fund in essence reasoned that in a domestic setting, all unsecured creditors were bound into the restructuring deal through the bankruptcy process. Since there was no analogous international mechanism to bind similarly placed creditors into the restructuring through a single vote, there was a gap in the global financial architecture that should be filled through the creation of a ‘Sovereign Debt Restructuring Mechanism’ (SDRM). 5 Treasury was sceptical that the SDRM could be made to work in practice. There were concerns about politicization of the mechanism. There were questions about the possible impact on official debt. There was no appetite for pursuing an international agreement that could result in a supranational body having the authority to supplant core US sovereign decision making or judicial authority. There was the basic judgement that there would be little Congressional support for any amendment to the IMF Articles needed to implement SDRM. In contrast, the advent of CACs offered the promise that the contractual framework could be used to better mimic domestic bankruptcy proceedings and bind creditors. In 2012, two important developments occurred, raising questions about the continued viability of the contractual framework to promote the orderliness and predictability of the sovereign debt-restructuring process and giving rise in some quarters to renewed calls for re-consideration of SDRM or statutory approaches more generally. These developments, left unaddressed, also had important implications for New York’s continued role as a major financial centre for the issuance of foreign law bonds. Long-standing debates about the meaning of the ‘ pari passu ’ clause in sovereign law bonds were underscored in judicial rulings. Many sovereign debt lawyers had long felt that the pari passu clause simply meant that the legal ranking of an instrument was equal (and not subordinate) to a borrower’s other debt instruments. Others, for over a decade through a novel interpretation of the clause, contended borrowers could be compelled to pay all of their obligations on a ratable basis. With US federal court rulings in New York supporting the latter interpretation, clearly the meaning of the ‘ pari passu ’ clause could no longer be considered settled. 6 Importantly, these legal challenges were not arising in the context of just one country; rather, there had been a substantial increase in creditor litigation over the past two decades impacting countries across the globe. 7 While bond-by-bond CACs had become the market practice in New York since 2003, the limits of this ‘per series’ approach became clear in the case of the Greek debt exchange. Of the 36 bond issuances governed by English law that included CACs and could partake in the debt exchange, only 17 were successfully restructured using CACs, accounting for 30 of the total value of Greek debt governed by foreign law. 8 In early 2013, against the background of these emerging questions about the ability of the contractual framework to continue delivering orderly and predictable outcomes, as well as renewed interest in statutory approaches, especially in the United Nations, Treasury staff convened a roundtable of governmental and private sector experts and interested parties to discuss potential changes to clauses in sovereign bond contracts. The effort was premised on the US retaining its long-standing reservations about statutory approaches, and instead examining what changes in the ‘ pari passu clause’ and in ‘bond aggregation’ could strengthen and impart renewed vigour to the contractual framework. Equally, the effort was premised on seeking pragmatic, targeted and concrete results, but not engaging in a meta-debate about broad strategic or conceptual approaches. At the outset, Treasury staff made clear that the USA did not support work on statutory approaches. For their part, the IMF representatives also made clear that the Fund had no intention of pursuing work on statutory approaches and it would be regardless infeasible to do so without the full support of the institution’s Executive Board, including major shareholders. At a kick-off meeting in April 2013, on the margins of the IMF/World Bank Spring Meetings, the Roundtable launched into a discussion of the evolution of the sovereign debt-restructuring process over the prior decade, recent ‘ pari passu ’ litigation and its implications and how ‘aggregation clauses’ could be used to help overcome some of the problems posed by bond-by-bond voting and increased creditor litigation. Private sector participants discussed how recent court ‘ pari passu ’ rulings could complicate the sovereign debt-restructuring process and how ‘ pari passu ’ language had taken on many disparate forms in contracts over the years. They were concerned about the consequences of the ‘ratable payments’ interpretation of the pari passu clause for the majority of creditors. With respect to aggregation features, there was a lengthy discussion of the Greek restructuring, and a view that the Greek foreign law bond restructuring was far less successful, because of the bond-by-bond collective action feature, than the Greek domestic law-governed bond restructuring. Some participants advocated developing ideas on aggregation across foreign law sovereign bonds so that there could be one vote to modify an entire series of bonds. However, it was also underscored that developing aggregation features could have important implications for inter-creditor equity considerations. Against this background, a number of key points were agreed at the meeting, in turn charting the path forward for the Roundtable: Modifications to contractual clauses should be developed to address the emerging issues that had complicated the sovereign debt-restructuring process. Clarity was needed on pari passu clauses to dispel confusion and provide legal certainty. The clause should be seen as an ‘equal ranking’ clause; the ‘ratable payments’ interpretation of the clause was not the intended meaning. Aggregation features in bonds, especially aimed at allowing one vote to modify a series of foreign law bonds, could represent a useful innovation to enhance the restructuring process, provided that strong safeguards were also incorporated to protect the rights of all creditors. At a second meeting in October 2013, again on the margins of the semi-annual IMF/World Bank meetings, the Roundtable reconvened to continue its discussions on pari passu clauses and aggregation. The group reviewed an options paper on the ‘ pari passu clause’. 9 In the end, the Roundtable reached several conclusions on the pari passu clause and narrowed down consideration to two of the options, both of which were seen as offering a plausible path forward: There was concern that the clause had resulted in significant litigation over the past decade, complicating the sovereign debt-restructuring process, and that the likelihood was for continued increases in creditor litigation in coming years. Several lawyers in the Roundtable in particular felt that given the confusion raised by the clause over the years and its uncertain meaning, the pari passu clause should be simply eliminated from bond contracts. However, others questioned whether market participants would readily accept elimination of the clause, and thus proposed retaining a rewritten version that disavowed the ratable payments interpretation of the clause. They pointed to market inertia as well as noted that retaining such a modified version of the clause would still protect against the risk of involuntary legal subordination. Participants agreed that the Roundtable needed to come to a consensus on pari passu to provide a basis for market acceptability for a first mover. The discussions on aggregation, in contrast, entered more of an exploratory realm. The Roundtable agreed that a key policy goal of constructing an aggregation framework was to reduce the scope for obtaining blocking positions, provide the sovereign with greater flexibility and at the same time protect against possible abuse or oppression of the minority by sovereigns. While there was wide acceptance of the concept of aggregation in principle, it was also recognized that to achieve these goals, there were numerous design details to be worked out with consequential legal ramifications and an enormous bearing on market acceptability. In wrapping up the second meeting, the Roundtable agreed to further pursue the one-limb option and its requisite features and come to a conclusion on the future of the pari passu clause. The IMF also expressed interest in pursuing further work on the contractual framework, using the Roundtable’s work as a foundation to inform its activities. An initial discussion focused on whether to use a ‘one limb’ aggregated voting structure, or a ‘two limb’ structure with an aggregated and a per series vote. Several European officials supported a ‘two limb’ structure as this approach had already been enshrined in the ESM treaty, developed and adopted within the euro-area. The rest of the Roundtable wished to explore whether a suitable ‘one limb’ framework could be developed, and felt an appropriate aggregation clause could further reduce incentives for creditor litigation. 10 One participant offered the insight that an important feature of a one-limb aggregation structure was that it would lessen the chances that a creditor—that might wish to vote against the proposal, but be willing to accept it should the requisite majority decide to do so—would ‘accidentally’ be kept out of the restructuring. The Roundtable began to delve into the kinds of protections that would be essential to protect against abuse of the minority. Most significantly, the Roundtable agreed that there should be a high voting threshold for one-limb aggregation, and that all participants in an aggregated vote should be treated the same. Participants also agreed that the scope of aggregated debt should be confined to foreign law sovereign bonds, and thus differ from the European CAC framework, which did not differentiate between foreign and domestic law bonds. In discussions in early 2014, including conference calls, and at a third meeting in April, the Roundtable reviewed a model aggregation clause 11 and bore down on achieving concrete results. In wrapping up this meeting, the Roundtable also welcomed ICMA’s proposal to develop model pari passu and aggregation language and conduct a public consultation. 12 To address the question of which pari passu option to pursue and given the view that eliminating the clause might not be seen as acceptable by all market participants, the Roundtable agreed to back model pari passu language that disavowed the ratable payments interpretation. The Roundtable further agreed that aggregation, allowing for a single cross-series vote with strong safeguards, along with a bond-by-bond restructuring option, would help promote the orderliness and predictability of the sovereign debt-restructuring process. With respect to safeguards, it was agreed that: ‘voting thresholds’ should be set at a level which an aggregated cross-series modification vote could only succeed with the support of a large super-majority (ultimately 75 per cent of the eligible outstanding principal); single-limb aggregation would be limited to ‘bonds governed by foreign law’ (outside of the euro-area, which retained its two-limb structure for foreign and domestic bonds); ‘uniform applicability’ would provide for an identical offer requirement for any cross-series vote; ‘robust disenfranchisement provisions’ would exclude bonds controlled by the issuer from the vote; and ‘enhanced transparency and information disclosure’ would be required such that the issuer would need to disclose its overall restructuring plan, including its proposed treatment of other groups of creditors and claims, as part of its offer. In subsequent months, ICMA’s model clauses became the new market standard. The IMF staff proposed to prepare a staff paper for the IMF Executive Board to endorse the key features of the model pari passu and aggregation language. 13 The third and last meeting of the Roundtable was by no means the end of the process. It was critical to develop a strong legal and market consensus behind the new clauses in order for a ‘first mover’ to move without facing market turbulence. Roundtable participants dedicated themselves to this task over the course of the remainder of the an initial and ICMA of proposed model clauses was provided to Roundtable participants for to market participants and their While the of the ICMA model clauses were the same for both the New York and were required to to the of each market. In the of information about the new clauses and their were with leading sovereign debt legal in both New York and Treasury staff also with market In particular, staff with representatives in a series of with of the New emerging market and and also reached out to several London-based Roundtable participants also with debt in potential emerging market sovereign bond issuing especially that had not in the working The IMF an role as The were by IMF staff in a series of and discussions with public debt the basis of a paper in large part by the of the the IMF Board also in the of 2014 the use of modified pari passu clauses in new international sovereign bonds so as to enhance legal and across The Board noted the broad support of for CACs with aggregation features, and in particular considered the limb’ clause with appropriate safeguards along the of forward in the model ICMA clauses as a significant to the sovereign debt-restructuring process. In addition to the IMF the of the market-based contractual framework also the strong of the official The of the G20 Finance and Bank meeting in Cairns, in as well as the G20 Leaders’ in in both the strengthened 16 Most significantly, countries began to sovereign bonds with the new clauses. In particular, Mexico in around the time of the the first public offering with the strengthened CACs under New York in bonds strong and in the in the same leadership as in 2003, the issuance with new CACs the first mover and no pricing impact Mexico’s issuance was by the of its Finance debt in the Around this time, many other countries from of the followed in was the first mover at the global leading the in the market. While the advent of the new CACs a major it not a and work to be to strengthen the contractual framework. The inclusion of new CACs in bonds will address the future of sovereign but it will not address the large outstanding noted by the that and it will 10 years for per cent to This process could be by Some market participants to be possible The of the new CACs so far been strong in the New York which a in which have more of an and been strong but not as but especially for the market. 17 Several issuers have it to thus over or raising in several than the more work and of a new global But in time, such countries will use new the new clauses. already this continue in some quarters about whether the of a restructuring should be through the required use of a structure, including one in which the to a and pay its This was not by the Roundtable, which was focused from the on in two pari passu and Some country representatives, especially at the United Nations, continue to for of a statutory the statutory approach little support in the IMF and and been by the USA and the key in which over of foreign law bond issuance of the new CACs the of the contractual framework and again work on statutory approaches to be needed or in financial policy The recent of CACs through the of the meaning of the pari passu clause and the advent of single-limb aggregation with strong creditor protections a of the of the international financial time and work needed for the new CACs to their full potential in the orderliness and predictability of the sovereign debt-restructuring process. in a of time, the strengthened CACs already a part of the international financial and have the of the contractual framework, the foundation for which was in the early US Treasury staff and a international in which all up their to of new

Virginija Kondratienė

The paper discusses the importance of the subsidiarity principle to the regulation of the global processes. It also analyzes the role of the subsidiary principle as a fundamental principle of the European Union legal framework in the perception of the identity of the civilizations as well as its influence on political-legal systems. Not only does the paper emphasize the importance of this principle to the European identity, but it also discloses the role of the idea of the subsidiarity, which was played in legal and social consciousness of the communities attributed to the Western and Eastern civilizations. The principle of subsidiarity is used here as a tool to disclose the identity of the civilisations and differences among them. Simultaneously, its positive role is highlighted in the global community’s solution of different kinds of conflicts (ideological, economic, religious or cultural) that arise among nations, countries or different civilisations. This article is aimed to demonstrante that reception of the principle of subsidiarity and it‘s institutionalization in the European Union and national legal frameworks are not accidental. The tools of legislative regulation based on this principle prevent global system from disregarding cultural differences. At the same time, it does not allow local identity to destroy the world unity. Thus, unified social systems can perfectly coexist with national, regional and local units, the latter ones maintaining their organizational structure and cultural traditions. Subsidiarity idea combining opposites makes sense as a principle of creating this diversity in unity, which ensures the integrity of autonomous structures making up the whole, preserving national, regional and cultural specificities of countries and people around the globe. The support of these processes provides the public with the opportunity to discover effective forms for the realization of self-organization and implementation of their needs and developing appropriate social structures and legal institutions regulating their activity. Through the examination of the concept of subsidiarity and aspects of its practical application in organizations, the article discusses the polarities of the different structure and management forms of the institutionalization of the principle of subsidiarity in the countries and its effect in the formation of the governance levels in the state, showing how balance of powers is achieved based on the subsidiarity principle, creating an effective mechanism of function distribution (determination of exclusive competencies) and their implementation (institutional interaction, their operational control). In structuring the institutional systems of the organization of the state, the subsidiarity concept is complemented with the elements of the management system decentralization, democratization, federalism and regional and local self-governments.

Roberto Caranta

EU administrative law has some specific characters when compared with national administrative law. This is particularly so because of the weak democratic legitimacy of EU rules. EU administrative law however shares a number of developments with national legal orders, such as a general trend to strengthen the judicial review of individual measures, and this especially so when fundamental rights are at stake. When compared with some national legal orders, dialogue seems to be still in an early phase. This is a shame because the political circle linking the decision makers to the People through representative democracy is weak and benefits could had by supplementing it by more closely involving the civil society and the stakeholders. The little in terms of developments we have, however, is enough to confirm the role of law and courts in this different perspective as the tools «to police conditions of access to decision-making networks. A powerful incentive to dialogue for European institutions could however come – in sectors like competition policy – from a possible shift from a French administrative law presumption of legality pattern to a US adversarial adjudication model, the latter substantially imposing on EU institution a burden of proof where before was a duty to give reasons. Taken down from the high throne where traditional continental administrative law has placed it, it makes sense for the Commission to double its efforts to come at some sort of agreements with the undertaking concerned.

Zdravko Petak, Anka Kekez Koštro

The Croatian “decentralization package” from mid-2001 has shown how multiple pressures for shifting power to the local level may actually result in relative failure. The central government has ceded the control in particular policy sectors by shifting responsibilities for certain educational, welfare and health services to the counties and municipalities. However, the decentralization initiative was excessively marked as very limited and strongly labeled by the vertical policy dimension, expressing the dominance of top-down incentives of the central government in comparison to bottom-up initiatives stemming from the local government units. The 2001 decentralized package did not substantially increase the portion of local governments finance in total public finance, showing a failure to provide local government units with stronger fiscal capacity. The central government bodies also did not take into account the alternative proposals made by various policy actors ranging from academic institutions, researchers in NGOs, and associations of local government organizations. All these things have contributed to a relatively negligible influence of the horizontal policy dimension on the decentralization outcome. The whole process can therefore be described as centrally controlled decentralization, or decentralization from above.

Satoshi NAKANO

In an era in which neo-liberalism has strong societal influences, it seems particularly indispensable to look into the efforts and achievements in Europe to create the social dimension of the integration. Particularly focusing upon the European social dialogue at the macro level, this article depicts its history, function and the challenges it faces.In the main section, the social dialogue at this level is examined in terms of (1) actors, (2) tripartite concertation, (3) consultation according to Articles 137 and 138 of the Treaty and (4) the bipartite, autonomous dialogue between the social partners. With regard to the actors, such problems as the decreasing density and legitimacy of trade union representation in some countries and the lack of a sectoral institution of employers are described, along with some recent organizational developments In the context of the Lisbon strategy adopted in March 2000, the tripartite concertation has taken a significant, albeit embryonic step towards the advent of the corporatist configuration that relates economic and social policies. The consultation processes have created three directives that set minimum standards in the EU. Together with the increasingly autonomous bipartite dialogue that began with a work programme in November 2002, the social dialogue now serves as the driving force of labour market regulation and social integration.Nevertheless, with the national corporatist systems being encroached upon, the European system has been facing some challenges In the last section, its major problems are classified into five categories: the legitimacy of interest representation, the effectiveness of social legislation, dim prospects as a means of macro-economic regulation, the decentralized systems of industrial relations in the CEE countries and an unclear position in the future associational democracy. The European social dialogue may open up a new possibility of formulating innovative policies based on participative democracy that was only available in each member state. Nevertheless, whether or not such a possibility will come true in the near future remains to be seen.

B. Balamurugan, T. Poongodi, M. R. Manu, S. Karthikeyan · 5 authors

The moving image archive of the US Agency for International Development (USAID) includes a copy of the film The Double Day (1975), cataloged in the series Moving Images Relating to International Development Programs and Activities, 1979–1991, a collection of more than eight hundred titles “created to provide information on assistance programs supported by the Agency for International Development (AID).”1 Yet, The Double Day does not, in fact, directly depict or engage with any specific development or aid initiative. Instead, the film—directed by US-based Brazilian filmmaker Helena Solberg as part of the International Women’s Film Project collective and described as “the first Latin American feminist documentary”—examines the gendered dynamics of paid and unpaid labor through the testimonies of women from Argentina, Bolivia, Venezuela, and Mexico.2 Its presence in the USAID archive is likely a consequence of its funding history, having received support from the Inter-American Foundation, a USAID-affiliated entity; the development agencies of Denmark, Norway, and Sweden; the United Nations Development Program; and US philanthropist Calvin Cafritz.3These transnational funding structures not only enabled the film’s production but also determined its archival destination, which renders legible its place within the history of international development.4 The Double Day’s institutional trajectory reflects the shifting configurations of aid, gender, and media during a historic moment when women were being repositioned at the center of what Arturo Escobar has described as development’s “regimes of visuality.”5 Especially relevant to The Double Day’s production and exhibition was the international institutional framework of Women in Development (WID). Emerging in the early 1970s and culminating in United Nations’ proclamation of 1975 as International Women’s Year, WID emphasized women’s participation in the global economy as both an index and mechanism of development. Indeed, The Double Day premiered at the World Conference of the International Women’s Year, held in Mexico City.6 Within this context, the film forms part of a broader trajectory of media use by international organizations that intensified during the 1970s—as best exemplified by Media Habitat, a collection of 236 documentary films commissioned by the United Nations to represent urban and rural development initiatives for the 1976 Habitat Conference on Human Settlements in Vancouver. As a policy-shaping initiative, Media Habitat primarily featured films from the Global South intended not only to illustrate but also to help codify standardized audiovisual markers of “underdevelopment” that determined access to the emerging global economic order and to international aid.7Framed in relation to these international institutions and their operations, The Double Day could similarly be considered “development media”—exemplifying the type of nonfiction media produced and distributed outside of the commercial film circuits whose aspects and subcategories have been variously described in scholarship as nontheatrical, useful, sponsored, institutional, industrial, educational, or nonprofessional/amateur.8 Scholars working in this area have emphasized the institutional contexts of such media’s production and exhibition infrastructures as shaping its instrumentalized effects. From a feminist perspective, such an approach is crucial to grappling with the broader question of how “gender impacts [these works’] shape, content, and trajectories.”9 Yet we also argue that, taken in isolation, the institutional and infrastructural contexts are insufficient to account for the complex relationship between media and development, potentially not only limiting our understanding of the reach and impact of development but also distorting our interpretive conclusions. For example, to categorize The Double Day as “development media” is to overlook the film’s place within Solberg’s directorial oeuvre, as well as within the histories of both transnational women’s filmmaking and radical Latin American documentary cinema to which it simultaneously belongs. Such exclusive framing is especially limiting given that women globally were disproportionately engaged in nonfiction production throughout the twentieth century—sometimes by political choice but more often due to structural exclusions from fiction filmmaking. Even in nonfiction historiography, however, institutional media has remained particularly marginal, reinforcing hierarchies that separate such works from the aesthetic and authorial frameworks through which film history has been constructed.10 This marginalization not only tends to erase women’s contributions but also presumes a “weak” or derivative authorship, rendering these films unworthy of the interpretive attention needed to apprehend their aesthetic and political complexity.11 The same dynamic is likely to structure assumptions about “development media” as well.Categorizing The Double Day exclusively within this category would further prompt us to assume top-down institutional analyses that have been characteristic of both institutional media methodologies and the scholarship on development at large. This, in turn, would risk obscuring this film’s radical Marxist approach to women’s labor as well as its concrete contribution to activism and its attendant grassroot structures. In Mexico City, The Double Day became a catalyst for feminist solidarity in practice when one of the film’s protagonists, Bolivian activist and trade unionist Domitila Barrios de Chungara, was invited to participate in the Tribune of Non-Governmental Organizations held alongside the official UN conference.12 There, Barrios de Chungara challenged Western feminist priorities by reframing the debate around labor, class, and imperialism, helping to articulate a shared Third World feminist agenda that significantly departed from the developmentalist vision of the United Nations and USAID.13 Seen through the lens of activist media, The Double Day helped forge transnational solidarity networks by enabling information exchange across the diverse voices that shaped its making—from the women featured in the film to the activists who circulated it—revealing a considerably more dynamic interplay between institutional and grassroots or contingent media practices.Moreover, the film’s Latin American context—reflected in Solberg’s formation in Brazil as the only woman in Cinema Novo, its focus on women from across the region, and its premiere and key reception in Mexico City—requires grappling with the regional specificities of the very notion of development in its multiple iterations.14 Far from being an epistemological and political framework imposed solely by the Global North, both the practices of development and the theoretical foundations of developmentalism (understood as a broad and polysemic set of discourses) were shaped through the active participation of Latin American economists.15 Within this iteration, underdevelopment, as a constitutive notion of developmentalism, became central to a distinctly critical strand, which by the late 1960s became known as the dependency theory.16 This same approach is reflected in some of the best-known Latin American radical film manifestos of the time, arising precisely from the same milieus to which Solberg belonged.17These various considerations of the film’s history illustrate the methodological challenges confronting feminist scholars seeking to assess the impact of development on media projects, theories, and practices. To disregard the developmentalist context of such works by emphasizing their political aesthetics and affects risks reproducing a romanticized narrative of heroic resistance (albeit from a feminist perspective). Yet to engage exclusively with their institutional and material infrastructures risks naturalizing developmentalism’s political and epistemological foundations at the expense of the goals and beliefs of the many women who participated in these projects. The contradictions and ambivalences that animate such histories call for feminist frameworks capable of holding both institutional complicity and radical possibility in view.This challenge resonates with ongoing debates about the politics of the archive and what Allyson Field has termed “the practice of informed speculation.”18 As she reminds us, feminist, queer, and decolonial methodologies have long taught us to “press at the limits” of the archive to “inoculate our scholarship against our evidence’s afflictions.”19 The concern that the evidence we draw on in our analysis reproduces the very structures and blind spots of the dominant ideology and therefore shapes and delimits our interpretation becomes particularly urgent when engaging the developmentalist media corpus. Informed speculation offers an alternative by inviting the experimental, creative, and speculative rewriting of history, mobilizing the archive “in a project that runs counter to the original purpose, or the imperative to preserve, or the conditions that led to erasure.”20 Yet, as Field cautions, such speculative gestures must remain grounded in a deep and “intimate familiarity with the archive” that we are working with and against. Building on this imperative, we suggest that the developmentalist archive, in particular, demands expansion and critical reconsideration in ways that unsettle the very disciplinary frameworks through which it has been studied as well as the larger institutional contexts for such knowledge production.Our focus on The Double Day in the opening of this introduction thus foregrounds the entanglements of institutional and grassroots forces, local and international contexts, structural and interpersonal relations, and creative and economic factors that have shaped not only this film but the broader ecosystem of development media projects—and their preservation—over time. Addressing such a constellation involves transgressing methodologically entrenched divisions between political economy and aesthetics, between material infrastructures and affective regimes; reckoning with divergent periodizations across film history and world economics; and situating these within the local specificities of women’s movements and international institutional programs. It also demands attentiveness to the coexistence of multiple, and sometimes competing, understandings of development—each historically, geographically, and ideologically situated.We imagine this special issue as an opening toward a critical dialogue, not only about how such an approach might be enacted in practice but also about the far-reaching ways development paradigms have shaped both our objects of study and the contours of the field itself. The decision to center institutionally sponsored films across all the essays in this issue is deliberate and enables us to highlight institutional critique as a vital methodological imperative within our analytical framework. Created within the frameworks of international organizations, state agencies, or NGOs, these films’ histories make legible the institutional logics that underwrite their production. Yet our critique does not stop at these specific entities. Rather, we argue for a broader interrogation of the political conditions and institutional infrastructures that shape media and knowledge production more generally. This includes contemporary corporations embedded in the digital platform economy, from streaming services to the rapid expansion of AI. Equally critical is a reflexive examination of academia itself, where departments of economics, political science, and centers for development have played a formative role in producing and legitimizing developmentalist theories and policy frameworks. While the humanities and arts have at times offered critical alternatives, they have also frequently mirrored and reinforced many of the same developmentalist assumptions. A feminist analysis of the nexus between development and media must therefore unsettle not only dominant archives but also the institutional and disciplinary foundations of our own scholarly practices.As scholars, we share the complex position of navigating the same tensions between institutional complicity and emancipatory aspiration as many of the media-makers whose work we study. Mirroring our subjects is also the transnational, collective mode of this special issue’s own production as it emerges from an ongoing informal working group we have sustained over several years. While relying on institutional and disciplinary affordances—such as university funding for conferences or access to academic publishing platforms—we have been working toward creating a community that exceeds, and often resists, the prevailing logics of our academic institutions. Our aim has been to create a space for shared inquiry and mutual support that pushes back against disciplinary siloing and technocratic neoliberal assessment modes of both labor and knowledge production—and this certainly extends to our experience collaborating with the journal editors throughout the publication process. Our goal has been to examine both the persistence and variability of developmentalism, understood as what Gustavo Esteva calls a “powerful but fragile semantic constellation,” as a conceptual formation that has historically inspired, legitimized, and mobilized media projects across Asia, Africa, and Latin America.21 And gendered biopolitics, from population control to gender mainstreaming, have remained integral to development policies and media practices, recurring across formats from institutional newsreels to film festivals.We share the conviction that, far beyond the history of nonfiction institutional media, development (as both a broad ideological project and a network of material and institutional practices) and developmentalism (as a set of discourses and theoretical models associated with development) have exerted a far-reaching influence on film and media cultures at large. As such, they must be treated as a major force in shaping global film and media systems and also the many ongoing assumptions behind their critical discourses. The discipline of communication studies was founded on modernization theory governed by Cold War goals of dissemination of Western liberal democracy around the world, while “an area studies framework allowed compartmentalizing Western and non-Western outcomes of technologies that were always claimed to be universal.”22 Despite critique from postcolonial and critical race studies, many of these frameworks have remained foundational for media theory.23 In historical scholarship, as we increasingly move beyond “modernity” as a dominant conceptual anchor, engaging with practices and discourses of development opens more precise analytical pathways. These film and media’s entanglements with the logics of and economic and the associated with as well as their conceptual underdevelopment, and impact in as diverse as and of media aesthetic and paradigms in film and film and funding are developmentalist assumptions to the they to underwrite the narrative and logics of and global media from the structure of the film to the cultures of argue that a examination of the historical entanglements between film and developmentalist aesthetics, modes of as well as infrastructures and critical the and that our contemporary media is a of the historical contours of development as a field of inquiry embedded within a of some of the methodologies by the featured in this special a of this complex history, to the larger at in media, development, and gender all its development a it as an of be with practices as divergent as and in In as we work on this the of the of the USAID the ideological that have the history of international the and of this on the global its a from development as a global practice and as an institutional and which over the has as a with its own media Yet or does not erase the historical impact of these the contradictions they have reflected and over the as the of development several crucial to the economic theories of development initiatives to and through the of the development an international policy framework at from the Global to the of the Global the by the political role of and the of the International the on was challenged by dependency theory and at development as global structural the neoliberal of the the Programs by the and World imposed and as conditions for and forms of assistance became known as the major markers for international development development has moving beyond economic to such as the Human Development and the Development and from international organizations such as the United Nations to a broader network of These frameworks increasingly of and liberal of and with what in many ways to various while the of the to development’s epistemological more scholarship has toward a of its and material the field has to a of and critical by and scholars, which development as a dynamic of conceptual and political to these the studies in this special issue call for sustained analysis in place of In we draw from a of and that in of of gender and to this special issue engage that and from Mexico to contemporary specific local historical of global distinctly feminist methodologies as well as attention to studies that this issue a in the global history of development on and documentary work in Mexico how early women infrastructures as of while US films an early of state and transnational on a outside the Global as the of developmentalist both the and markers of development media, its to the and Latin central grounded in archival also women’s in transnational and the methodological of archives on study of the series to a a digital media not by but by women not as but as subjects and within circuits of neoliberal and the aesthetics and of how development’s has models of to contemporary neoliberal paradigms of and analysis how digital and gender and practices, discourses on and their of these essays the of some of the historical of developmentalist as the question of the role of the state within such on a notion of economic as a and the dominant of development that the state as the for and through infrastructural projects. This understanding of development was shared across both of the as well as in the Third The United and the increasingly mobilized international in the of the modes of international at the postcolonial of policy and ideological These programs were at the expansion of their and of while with the and decolonial of The conceptual between modernization and development that the Cold in of and hierarchies of that long and As an of postcolonial their role as of international aid concern about the of Western development projects. In alternative across the Global South that to structural between and through policies of and In many they were further the global structures. In Latin for example, this approach was through organizations such as the United Nations for Latin and the both developmentalist projects and their have taken many forms historically, and they have and they have been to a of projects, and postcolonial and development has been and in ways and with frequently political While many of these alternative frameworks the embedded in dominant Western they often technocratic and assumptions. gender and gender as for the of to be shaped by This becomes particularly in the media that of development where women frequently a crucial associated with and women were as both the subjects and of their participation in the and labor often as the index of In this study of from the 1970s how women were as of this as these about women’s urban and recurring and of a within the own of and critique that official examination of archives and enables a feminist interrogation of their mobilizing a of the in the of contribution to this issue similarly the of a dynamic within as well as across ideological the of women’s and the media of the and as active in labor and as integral to the technocratic women became of as their labor remained a of and analysis and archival with attention to the specific of and It also transnational that as a and affective a nexus of and practices through which gender, media, and developmentalism one film not as a but as part of the of alongside and work a broader concern of this special media as a of developmentalist projects. The debates the World and which international such as the United Nations and a critical historical for such primarily by postcolonial and of the for the of media and communication infrastructures in as to counter Western The a between and economic how systems of media and reinforced global hierarchies of and in an agenda that supported and alternative media infrastructures across postcolonial contexts, the framework gender as an analytical This “gender in the 1970s by of the Women in Development in relation to The Double its political critique of with its broader to center women in development policy through and This was also in of media, which was shaped by its international reach and audiovisual production and and and Yet, as WID institutional it also to the and of the women’s development programs often by in These were by a of studies, and on and the to of women’s presence and through the of their economic and In this on the filmmaker this history directly by the and of for women by the WID framework during the with and agencies the of and against Women in at the of the neoliberal turn, when institutional media often the only to access and support to projects. The an by this dynamic as of the from the Global South are to engage with the developmentalist assumptions funding models that their similarly the as a in developmentalist media history by the of and centers on the Film a between of and the attention toward the and labor by and work was foundational the of and the of audiovisual aid, as both a of development projects and a critical for their the in this issue argue for a with media, gender, and developmentalism as an field of that is and shaped by feminist and methodologies and that challenge the entanglements between academic knowledge production and and technocratic development And while methodological these dynamics at the structural the of feminist in media and cinema by this the very a