europeanization and the unraveling european state: dynamics and feedback effect

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European Foreign Affairs Review 10: 479-499, 2005. © 2005 Kluwer Law International. Europeanization and the Unravelling European Nation State: Dynamics and Feedback Effects STEPHAN LEIBFRIED* AND DIETER WOLF" I Introduction Any analysis of the state and its interaction with globalization needs to confront the hybrid nature of European integration. Some soeiai scientists' see Europeanization as part and parcel of globalization. Europeanization is perceived as part of the force that undermines autonomy and sovereignty of traditional national welfare states, disables their capacity to govern and redistribute, and diminishes democratic legitimacy of politics. Here, Europeanization becomes synonymous with liberalization, denationalization and the loss of national borders - a force majeur beyond the control of human institutions.^ Another group of scholars portrays European integration as the nation state's natural response to the challenges of globalization.^ Here, supranational cooperation is understood as the way to re-territorialize denationalized global players, re-regulate borderless markets and secure social and environmental standards at a higher level - all in the face of international competition and the neo-liberal market-making activities of organizations such as the WTO. Stephan Leibfried is Professor of Public and Social Policy in the Department of Political Science at the University of Bremen, and Director of Bremen's TranState ('Transformations of the State') Research Centre, which began work in 2003 with the financial support of the German Research Council (DFG). Dieter Wolf is political scientist and Executive Manager of the TranState Research Centre at the University of Bremen, where some 65 researchers are working on 15 projects covering core issues relating to the transformation of the modem state since the 1970s. First results were presented in Stephan Leibfried and Michael Zurn (eds). Transformations of the State? (Cambridge University Press, Cambridge, 2005). ' See Peter Nahamowitz, 'Das Europareeht als "teilglobalisiertes" Reehtssystem. Genugt der EG-Vertrag den Anforderungen der "Globalisierung"?' in Rlidiger Voigt (ed.), Globalisierung des Rechts (Nomos, Baden-Baden, 1999), pp. 141-181. ^ Elmar Altvater and Birgit Mahnkopf, 'Tarifautonomie gegen okonomische Sachzwange im vereinigten Europa' (1993) 46/8, WSI Mitteilungen, pp. 503-512. ^ Ulrieh Beck, 'Europa als Antwort auf die Globalisierung' in Hans-Ulrich Jorges (ed.), Der Kampfum den Euro. Wie riskant ist die Wahrungsunion? (Hoffmann & Campe, Hamburg, 1998), pp. 19-23; Ulrieh Beck and Edgar Grande, Das kosmopolitische Europa. Gesellschaft und Politik in der Zweiten Moderne (Suhrkamp, Frankfurt a.M., 2004).

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  • European Foreign Affairs Review 10: 479-499, 2005. 2005 Kluwer Law International.

    Europeanization and the Unravelling European Nation State:Dynamics and Feedback Effects

    STEPHAN LEIBFRIED* AND DIETER WOLF"

    I Introduction

    Any analysis of the state and its interaction with globalization needs toconfront the hybrid nature of European integration. Some soeiai scientists'see Europeanization as part and parcel of globalization. Europeanization isperceived as part of the force that undermines autonomy and sovereigntyof traditional national welfare states, disables their capacity to governand redistribute, and diminishes democratic legitimacy of politics. Here,Europeanization becomes synonymous with liberalization, denationalizationand the loss of national borders - a force majeur beyond the control ofhuman institutions.^ Another group of scholars portrays European integrationas the nation state's natural response to the challenges of globalization.^Here, supranational cooperation is understood as the way to re-territorializedenationalized global players, re-regulate borderless markets and secure socialand environmental standards at a higher level - all in the face of internationalcompetition and the neo-liberal market-making activities of organizationssuch as the WTO.

    Stephan Leibfried is Professor of Public and Social Policy in the Department of PoliticalScience at the University of Bremen, and Director of Bremen's TranState ('Transformationsof the State') Research Centre, which began work in 2003 with the financial support of theGerman Research Council (DFG).

    Dieter Wolf is political scientist and Executive Manager of the TranState ResearchCentre at the University of Bremen, where some 65 researchers are working on 15 projectscovering core issues relating to the transformation of the modem state since the 1970s. Firstresults were presented in Stephan Leibfried and Michael Zurn (eds). Transformations of theState? (Cambridge University Press, Cambridge, 2005).

    ' See Peter Nahamowitz, 'Das Europareeht als "teilglobalisiertes" Reehtssystem.Genugt der EG-Vertrag den Anforderungen der "Globalisierung"?' in Rlidiger Voigt (ed.),Globalisierung des Rechts (Nomos, Baden-Baden, 1999), pp. 141-181.

    ^ Elmar Altvater and Birgit Mahnkopf, 'Tarifautonomie gegen okonomische Sachzwangeim vereinigten Europa' (1993) 46/8, WSI Mitteilungen, pp. 503-512.

    ^ Ulrieh Beck, 'Europa als Antwort auf die Globalisierung' in Hans-Ulrich Jorges (ed.),Der Kampfum den Euro. Wie riskant ist die Wahrungsunion? (Hoffmann & Campe, Hamburg,1998), pp. 19-23; Ulrieh Beck and Edgar Grande, Das kosmopolitische Europa. Gesellschaftund Politik in der Zweiten Moderne (Suhrkamp, Frankfurt a.M., 2004).

  • 480 LEIBFRIED AND WOLF

    So, is Europe part of the problem, or part of the solution? In other words,has Europe become obsolete, a hollow passe model, now supplanted byglobalization? Was it just a passing stage in regional liberalization? Does theEU, then, share the fate of the traditional nation state? After fifty years ofits controversial and precarious existence, is the EU about to fall victim toglobalization?

    To answer these questions, we will, first, outline the features that thetraditional nation state displayed during its 'Golden Age' in the 1960s andearly 1970s. While we often look back on the 'good old days' of autonomyin governance and redistribution, such fond memories may be based asmuch on nostalgia as on reality. With such a taxonomy we can paint amore comprehensive and consistent picture of the national, democratic,constitutional and interventionist state than we could if we relied on earlierdefinitions/descriptions of the state, which relied on a much simpler brush.

    We shall, second, outline the changes in the modern state that occurred inthe last three decades: Which transformations have taken place, as measuredagainst the benchmark of the classic nation state? We will show how the fabricof statehood itself is being unravelled, how denationalization, individualizationand other dynamics in modern societies have shifted public tasks, functionsand capacities away from the one central institution, the nation state, intothe hands of many different bodies, institutions and actors, be they publicor private. This path into the post-national constellation is marked by manyturbulences but is also an uneven, bumpy passage - and might even turn outto be quite different, diverging passages.

    The taxonomy will, thirdly, be employed to describe the current dynamicsituation of European integration. The EU can be understood as being anessential part of the transformation of the nation state, be it of the process oftransformation, the unravelling, or be it of its end result, the reconfiguration.Europeanization, then, goes beyond simple liberalization, is more than'market-making plus a common currency'.

    We end, fourth, with conclusions from a historical comparison of howmodern statehood transformed. Here we show that both camps of scholarshave caught some of the truth: Europeanization, to some extent, contributes tothe unravelling of the state and it is, at least to some measure, the force thatrestricts national autonomy and sovereignty. However, the EU also stands fora new configuration of modern statehood, if we may apply the term state tothe EU level itself. The EU has absorbed a whole envelope of tasks, functionsand instruments that are not well understood in analogy to a European statemodelled along the lines of the nation state but are much better grasped asan essential dimension of a genuinely novel form of public structure. It isnot all embracing, not always autonomous, not genuinely sovereign, but stilleffective, constitutional and legitimate.

  • EUROPEANIZATION AND THE UNRAVELLING EUROPEAN NATION STATE 481

    The EU, thus, needs to be distinguished from both the classic notionof a nation state and from concepts of 'global governance' or 'complexworld governance'. It follows that European integration - combined withdenationalization - neither means that the classic nation state disintegrates,and is being replaced by something new, nor does global governance makeregional European integration outdated."* The EU will continue to develop andevolve, but it will do so neither as an intrinsic part of global dynamics, nor as asimple leftover from idealist notions that had emerged at the end of World WarII, nor as an expression of realist endeavours to contain and maintain power inthe cold war, with the nation state now dissolving into 'world society'.

    II The Dynamics of Modern Statehood

    If we search for a definition of the modern state, we soon discover someclassic recipes: Georg Jellinek (1851-1911), in his Staatslehre (1900), definedthe state via three components: undisputed territorrial control (Staatsgebiet),controlling a population (Staatsvolk), and political rule (Staatsgewalt).^ MaxWeber (1864-1920) emphasized the sword and characterizes the state throughits 'monopoly of the legitimate use of force'.^ By contrast, Carl Schmitt(1888-1985) defined the power to rule in a state of emergency or otherexceptional circumstances as the central characteristic of modern stateness, asthe key to sovereignty.'And, finally, Niklas Luhmann (1927-1998), conceivedthe state as being just one of many subsystems of society - among them theeconomy, culture, religion or law - though a subsystem that originally wasmeant to govern all other subsystems. The building of subsystems was drivenby functional differentiation toward 'autopoiesis' of their structures, in thedirection of self-centering; this process, in the end, leads to a situation inwhich the state, at best, can govern itself.^

    These definitional enterprises were essential to establish the key notionsinforming the understanding of modem stateness. But all these definitionsshare one shortcoming: All build on the status quo of the classic nation state,as it had formed from the end of the nineteenth to the mid-twentieth century,say the 1960s. According to this standard all earlier and later states will

    " Mark A. Pollack, 'Theorizing EU Policy-Making' in H. Wallace, W. Wallace and M.A.Pollack (eds), Poliey-Making in the European Union (5th edn, Oxford University Press,Oxford, 2005), pp. 13-48; W. Wallace, 'Post-Sovereign Governance: The EU as a PartialPolity', in the same volume.

    ' Georg Jellinek, Allgemeine Staatslehre (Haring, Berlin, 1900).' Max Weber, Economy and Society, 2 vols, edited by G. Roth and C. Wittlieh, transl. by E.

    Fischoff (University of California Press, Berkeley, CA, 1978 (first publ. in German 1921)).' Carl Schmitt, Political Theology. Four Chapters on the Concept of Sovereignty, transl. by

    G. Schwab, (The MIT Press, Cambridge, MA, 1985 (first publ. in German 1922)).' Niklas Luhmann, Die Politik der Gesellschaft (Suhrkamp, Frankfurt a.M., 2000).

  • 482 LEIBFRIED AND WOLF

    seem precarious, incomplete or crisis prone. To understand the dynamic ofthe modern state we will need another, less biased and more comprehensive,descriptive definition. We can find it if we start out from the four basicdimensions of the state that developed historically: resources, which includessecurity, finance, personnel and territory; rule of law, i.e. a rationalizedregime of competencies and a court system; democratic legitimacy, whichrefers to acceptance in the citizenry; and intervention, which encompassessocial regulation, infrastructure and redistribution.^ While these dimensionscan be isolated analytically, they are, in historical perspective, mainly oneinterdependent complex. Without the interdependent and varied dynamics ofthese dimensions, each feeding on the three others, modern statehood wouldnot have emerged at all.

    Feudal societies in the High Middle Ages lacked essentially all thesedimensions of statehood. They developed as a complex system of economic,legal and power-related dependencies with various overlapping regional andlocal jurisdictions. A peasant could not only be subject to the rule of the loweraristocracy, but also a tributary to convents or monasteries, parishes andto other landowners. Over time, a highly complex and, in the end, obscurenetwork of property titles and infiuences developed which ultimately securedthe political rule of the emperor, who frequently served as arbiter of the manydisputes arising. Feudal societies were fixed and static structures, any attemptsto change them inevitably ran up against numerous lines of vetoes.

    The first to break out of this rigid system were the larger towns. As centresof trade and commerce they accumulated wealth and also began to initiateand adopt measures that developed the economy. The towns predictably cameinto confiict with the feudal powers, and frequently extensive practices werenecessary to eliminate the claims which the lower aristocracy and the churchheld against the towns, usually resorting to bribery, occasionally to forgery,but often also to violence. The Hanseatic League and the Italian city-statestestify to the commercial power that such towns could develop.

    It was, however, not primarily the towns that ended the feudal system, butthe incorporation (Mediatisierung) of feudal powers by royal dynasties, asin France or England in the late Middle Ages and in the early Modern Age.The absolutist rulers in the end were able to subjugate regional and localnobility, often bestowing on them ceremonial offices in the royal householdto compensate them for powers lost, and monopolized domestic power forthemselves. The rulers became 'sovereigns' in their territories and finally, asin England and France, established standing armies and navies to protect theirterritory. This put an end to the many feuds and disputes, and offered moresecurity to life and property of the subjects and it also paved the way for the

    ' Michael Zurn and Stephan Leibfried, 'Reconfiguring the National Constellation'in Michael Zurn and Stephan Leibfried (eds). Transformations of the State? (CambridgeUniversity Press, Cambridge, 2005), pp. 1-36.

  • EUROPEANIZATION AND THE UNRAVELLING EUROPEAN NATION STATE 483

    mutual recognition of sovereignty by the other rulers, consolidated with thePeace of Westphalia in 1648.'"

    Standing armies, and also the pomp and splendour required to obtain andmaintain power, as in Versailles and Sanssouci, are quite costly. These costscould not be born by the subsistence economy of feudal agrarian times or bytrade and urban commerce. Thus, having gained their monopoly of power,most sovereign rulers had to develop their financial resources via mercantilistpolicies. 'Colbertist' policies - named after Jean-Baptiste Colbert (1619-1683), the Minister of Finance under King Louis XIV- vis a vis manufacturing,the admission of Huguenots, land drainage, long-term measures like thesewere taken to stimulate the economy and generate more revenue. Beyondsubsidies, the rulers had something new to offer: the 'incorporated' local andregional nobility plus the clergy also potentially represented a huge, duty-freedomestic market, and the sovereigns regularly encouraged such developmentsby standardizing weights and measures and by issuing a common currency."

    Although the complex feudal structures of the late Middle Ages hadalready relied on some form of law, the emerging national and interregionaltrade networks paved the way for the modern rule of law. While the HanseaticLeague addressed the issue of trust in a rough-and-ready way by relying onfamily ties, personal relations and a rigid code of honor, a large system a laColbert could only function properly if the sovereign reliably enforced privateagreements. This restricted the arbitrariness of the sovereign extremely. ThePrussian 'Miller of [i.e., near the castle of] Sanssouci', a legendary figuredated to the late 1740s, could be confident that even Frederick the Great(1712-1786) could not take or impede his mill because the Justices in Berlinwould stop that: 'Sire, there are still Judges in Berlin [at the Kammergericht]'('Sire, es gibt noeh Richter in Berlin'). The cost of enforcing and securingthe sovereign's monopoly of rule required a mercantilist development of theeconomy and an encompassing, predictable rule of law, one that could alsobe applied against the sovereign himself. The government still was by nomeans a democratic one. Louis XIV could practically make any law he saw fit.However, arbitrariness at the level of implementation was already in decline.

    Societal rallying cries for 'no taxation without representation' are, for us,forever associated with the Boston Tea Party (1773) and the American Warof Independence (1775-1783). Although citizens had demanded politicalparticipation long before, also in the Hanse or the Italian city-state republics,oligarchies had persisted, with political power in the hands of a few patricianfamilies. Not until the American Revolution (Declaration of Independence1776; US Constitution 1787) and the French Revolution (1789) did the 'Third

    '" Hendrik Spruyt, The Sovereign State and its Competitors: The Analysis of SystemsChange (Prineeton University Press, Princeton, NJ., 1994).

    " Rainer Gommel, Die Entwicklung der Wirtschaft im Zeitalter des Merkantilismus 1620-1800 iO\denhourg, Munchen, 1998).

  • 484 LEIBFRIED AND WOLF

    Estate', the well-heeled non-aristocrats, get involved in political decision-making in major ways. The 'ruler' was no longer the sovereign, but ratherthe parliament itself, though parliamentary seats were still not taken up bythe representatives of 'all the people'. Women were denied the vote and therapidly expanding proletariat did not have unrestricted access to the ballotbox. This situation could not be maintained for long, and the rise of socialdemocracy in the second half of the nineteenth century finally gave all thepeople democratic sovereign power, a process concluded with the end ofWorld War I.

    This, in turn, bore consequences for economy and society. At the latest,after the Great Economic Crisis of 1929, the 'Fourth Estate' insisted on itsentitlement to a share in national income through the ballot, pushed for animproved welfare state amongst others via progressive income taxes, and foran increased role of the state in managing the economy. The bourgeoisie thathad become rich through mercantilism had, thus, paved the way for universalpolitical participation. Now, the intervention state was meant to seize controland to take redistributive measures by regulating economy and society.'^

    The period now retrospectively often labeled the 'Golden Age' of the nationstate, the 1960s and early 1970s, is historically unique. All four dimensionsof the modern state were combined and unified in one institution, the nationstate, that became the territorial, rule-of-law, democratic interventionist state,which we denote with the acronym TRUDI. Looking back at the historicaldevelopment of the four dimensions of modern statehood, as just outlined,several insights become obvious:

    - TRUDI is by no means the only possible and certainly not the inevitableoutcome of history. The Italian city-states fell only when the conscription-based mass armies of Napoleon overwhelmed them in the early years ofthe nineteenth century and the Hanseatic Cities lost their independenceonly in 1868 as the North German Union {Norddeutscher Bund) wasestablished. For a long time, it remained unclear which force would prevailin the struggle for political dominance: the primarily economic power ofthe commercial metropolizes or the mainly military might of the territorialsovereigns. England's secure geographical position gave her an advantagein economy and security over other European nations and demonstrates thatboth ways could and did coexist.

    - TRUDI does not imply that only this configuration is possible or that it mustbe the true and only standard, while all other forms turn into deviations.Modern statehood itself as it evolved in the Golden Age was also a quiteheterogeneous configuration: These different versions of stateness do havea high common denominator, however, and exclude other patterns of public

    ' Karl Polanyi, The Great Transformation: The Political and Economic Origins of OurTime (Beacon Press, Boston, Mass., 1944).

  • EUROPEANIZATION AND THE UNRAVELLING EUROPEAN NATION STATE 485

    authority: Neither Somalia, nor the Palestinian Authority, nor Taiwan arecharacterized by all four dimensions of statehood.'^

    - Since TRUDI is not the natural outcome of history, it also does not implyan end of history. The modern state has developed further since its GoldenAge of the 1960s and 1970s, has reconfigured, and maybe decisively, in itsnational union of dimensions.

    Ill TRUDI's Development Since the 1970s

    We will not recapitulate the scholarly debate on what caused the increasedpressures on the nation state. The buzz words of that debate - the end of thecold war, globalization, denationalization, liberalization, individualization,technological progress, the growth of market interdependence and ofvirtual interactions in human relations - make it clear that it is a complexprocess, with no single cause.''' The effects of these various driving forces onWestern nation states are likewise far from straightforward, and certainly notuniform.

    If one structures these dynamics by the direction in which they point, wecan distinguish a functional and a territorial pathway.'^ Organizational change,the y-axis in Figure 1, is about alterations in how political tasks are allocatedbetween actors in society and government: tasks can be increasingly privatized(liberalized, deregulated) or nationalized (socialized), that is subsumed undernation state control. The territorial x-axis is about how tasks are assigned todifferent political levels, with the national level as the starting point: theyare either sub-nationalized or internationalized. If we combine both axes, thescheme accounts for all the theoretically possible changes that may occurvis-a-vis the status quo ante. The different developments shown here do notpoint in the same direction as far as the overall reconfiguration of TRUDI isconcerned. Also, each of the four dimensions of TRUDI - resources, rule oflaw, democracy and welfare intervention - is affected differently. The fabricof the nation state seems to unravel, with its different dimensions no longerbundled in a single institution.

    In resources we observe both tendencies to privatize and internationalize.Though threats of interstate war and violations of human rights still exist,they have decreased since the end of the cold war. Until the 1980s the main

    ' Ziirn and Leibfried, note 9 above, p. 11.''' Herbert Kitsehelt, Peter Lange, Gary Marks and John D. Stephens, 'Introduetion' in

    Herbert Kitschelt, Peter Lange, Gary Marks and John D. Stephens (eds). Continuity and Changein Contemporary Capitalism (Cambridge University Press, Cambridge, 1999), pp. 1-8.

    ' Ziirn and Leibfried, note 9 above; Edgar Grande, 'Globalisierung und die Zukunftdes Nationalstaats' in Ulrich Beck and Wolfgang BonP (eds), Modernisierung der Moderne(Suhrkamp, Frankfurt a.M., 2001), pp. 261-275.

  • 486 LEtBFRIED AND WoLF

    prohlem stemmed from states that were 'too strong', threatened neighbouringstates with war, and suppressed their own eitizens. Nowadays we increasinglyface the challenges of 'failing' or 'failed states', of state structures with weakor non-existing central powers, states in which warlords and clans privatizethe means of force and that create new security threats like transnationalterrorism, civil wars, mafia-like structures and organized crime.'* Traditionalpatterns of securing peace and stability cannot really address such privatizedthreats. Al-Qaida is rarely influenced by political pressures, negotiations,international sanctions, increased armament or atomic deterrence; the samegoes for the warlords in African civil wars, as in Liberia, the Congo orSomalia.

    Figure 1. Transforming TRUDI? From the national to the post-national constellation

    OR

    GA

    NIZ

    AT

    ION

    AL

    CH

    AN

    GE

    Privatization

    Shift onto thesocietal level

    Status Quo Ante

    Continuance on therespective level

    State Expansion

    Shift onto thenational level

    TERRITORIAL CHANGE

    Subnationalization

    Shift onto thesubnational level

    'Localization'

    (Privatization)

    Regionalization

    Fragmentation

    Status Quo Ante

    Continuation on thenational level

    'Socialization'

    (Deregulation)

    Status Quo

    TRUDI's nationalconstellation

    iNationalization

    (Socialization)

    Internationalization

    Shift to theinternational level

    Transnationalization

    Internationalization

    Supranationalization

    In addition to the national army and police we find ever more privateactors or public-private partnerships providing security: in the Iraq Warprivate companies not only supply the US Army, they also organize trooptransport and the building of bases and barracks plus their maintenance. TheBritish Army has been privatizing the camps where its troops exercise and themilitary schools for years. The military is engaging there only on a contractual

    '* Bernhard Zangl atid Michael Zurn, Frieden und Krieg. Sicherheit in der nationalen undpostnationalen Konstellation (Suhrkamp, Frankfurt a.M., 2003); Mary Kaldor, New and OldWars Organized Violence in a Global Era (Polity, Cambridge, 1999).

  • EUROPEANIZATION AND THE UNRAVELLING EUROPEAN NATION STATE 487

    hasis. The British Air Force will rent its air refueling capacity from AirbusIndustries. The tanker aircrafts are owned by a private company, a subsidiaryof Airbus, and made available to the Royal Air Force as needed. Otherwisethey are utilized for civilian tasks. Looking at domestic security and crimeprevention one should finally note the private prison facilities in the USAor the massive expansion of private security services. Torture scandals inIraq prisons have also shed some light on US practice to even hand over theinterrogation of prisoners to private service providers.

    When we look for internationalization in resources, the security areareveals an ever stronger transnationalization of social threats, like terrorismand organized crime. The old and classic terrorism of the 1970s could be tracedback to some few states, as with Palestinian terror. Or internationalization wasthe simple result of terrorists trying to escape the national police force byescaping abroad. Today that model does not apply to transnational drug cartelsor to Al-Qaida: the removal of the Taliban government in Afghanistan did notchange the regional threat of terror in any significant manner. And in severalLatin America states the overthrow of the government would not impact toa serious degree upon the social foundation of the drug mafia. Nevertheless,the national struggle against transnationalized threats such as these hasbeen internationalized too. The manifold problems of intergovernmentalcooperation notwithstanding, not only were Interpol and the instruments forthe common prevention of money laundering strengthened, but the EU madefirst steps towards supranationalizing the war against crime with Europol orthe European arrest warrant.'''

    Internationalization of resources also includes revenues, the state'smonopoly on taxation. Liberalization and the increase in virtual interactionsin the economy make it easier for mobile, transnational capital to evadecountries with high taxes. We do not refer only to criminal tax evasion, butto completely legal strategies of 'international tax planning' through 'thincapitalization' and 'transfer pricing'. In the last decades mobile capital thushas acquired additional exit options from national redistribution.'* Althoughmany scholars consider international cooperation in tax policy weak andunsuccessful, it has increased markedly. In the EU, except for customsduties, there is still no supranational tax. Going beyond the many bilateralagreements about avoiding double taxation, which were made in the years

    " Jorg Monar, 'Zur politischen Konzeption des Raumes der Freiheit, der Sicherheit und desReehts: Faktoren und Elemente' in Matthias Chardon, Ursula Goth, Martin Grope Huttmannand Christine Probst-Dobler (eds), Regieren unter neuen Herausforderungen: Deutschlandund Europa im 21. Jahrhundert. Festschrift fiir Rudolf Hrbek zum 65. Geburtstag (Nomos,Baden-Baden, 2003), pp. 237-251; Markus Jachtenfuchs, 'The Monopoly of Legitimate Force:Denationalization, or Business as Usual?' in Leibfried and Zurn, note 9 above, pp. 37-52.

    '* Stefan Sinn, 'The Taming of Leviathan: Competition Among Governments' (1992) 3/2Constitutional Political, pp. 177-196.

  • 488 LEIBFRIED AND WOLF

    past, OECD states also managed to agree on measures against 'tax havens'and EU Member States on information exchange ahout capital returns.''

    The rule of law has also heen privatized and internationalized to someextent. Until the 1970s we saw the modem constitutional state expandpublic law-making into private law, especially into product liahility andconsumer protection. During the last two decades, however, private law-making increased again, as with transnational technical norms and standards,commercial rating agencies or a further development oiLex Mercatoria or theCodex Alimentarius. At the same time we see further privatization of disputesettlements as concerns contractual penalties and commercial mediation orarbitration.^"

    The internationalization of the rule of law is apparent, first, in theincreasing influence of judicial - as against purely diplomatic - instrumentsin many spheres of international relations. Especially in world trade butalso in environmental protection or human rights, international regulationincreasingly takes the form of binding law, enforced by numerous internationalcourts and dispute settlement bodies. The debate on the hardening of soft lawreveals that in international law formerly soft cases are increasingly judged byhard rules; hegemonic positions of power, and the interests behind them, thenare no longer shielded and protected. Furthermore, to implement legal claimsit is no longer necessary that the legal situation and the material constellationof political forees are congruent.^'

    Legitimacy seems to internationalize least. We observe one parliamentbeyond the nation state, the European Parliament. But also severalinternational organizations, like the WTO or the IMF, have increasinglyopened up to cooperation with non-governmental organizations. This not onlystrengthens the influence of NGOs in international politics but also breaks theground for a transnational civil society. That such discourse communities arewithin limits possible beyond the realm of the nation state is exemplified bythe EU.22

    " Philipp Genschel, 'Globalization, Tax Competition, and the Welfare State' (2002) 30/2Politics and Society, pp. 245-275; Philipp Genschel, 'Globalization and the Transformation ofthe Tax State' in Leibfried and Ziirn, note 9 above, pp. 53-71.

    Bernhard Zangl, 'Is There an Emergent International Rule of Law?' in Leibfried and Zurn,note 9 above, pp. 73-91; Bernhard Zangl, Die Internationalisierung der Rechtsstaatlichkeit(Campus, Frankfurt a.M., 2005, forthcoming).

    ' Michael Zum and Jurgen Neyer, 'Conclusions: The Conditions of Compliance' in MichaelZum and Christian Joerges (eds). Law and Governance in Postnational Europe: ComplianceBeyond the Nation-State (Cambridge University Press, Cambridge, 2005), pp. 183-217.

    " Bemhard Peters, Stefanie Sifft, Andreas Wimmel, Michael Bruggemann and KatharinaKleinen-von Konigslow, 'National and Transnational Public Spheres: The Case of the EU' inLeibfried and ZUrn, note 9 above, pp. 139-160.

  • EUROPEANIZATION AND THE UNRAVELLING EUROPEAN NATION STATE 489

    The intervention state has undergone a large transformation. It was oftenprivatized and internationalized at the same time. Most substantive aspects ofwelfare intervention have been affected by privatization. The scope for private'regulation' of markets has increased substantially, in particular as concernsthe private standardization of technical norms but also the developmentof a code of conduct for corporate governance. Also, the provision ofinfrastructure has heen massively privatized, as in telecommunications orelectricity. The welfare state's redistribution of income did not remain itsexclusive task. Private elements in the provision of social security wereincreased in continental welfare states and they became hegemonic in somecountries of Eastern Europe and in the United Kingdom in pensions. Butprominent .examples of privatization are also non-profit donations of wealthypersons, for example of Bill Gates or George Soros, and the recent recorddonations of citizens, after the 2004 Tsunami or the 2005 hurricane Katrina inNew Orleans. In many other intervention-state spheres, like the arts, culture,sports, the level of public goods could hardly be maintained, if privatesponsoring had not stepped in.

    As concerns territorial change in the intervention state, scholars have,for a long time, maintained that outside the nation state proper only'negative integration' - in the sense of market-making - is possible, andthat again is limited to 'product-oriented' regulation.^^ This is said to leadto the denationalization and deregulation of national markets and to theirtransnational reintegration as 'common markets'. These markets, however, arealleged to be necessarily less regulated, and - due to locational competition- to be prone to regulatory 'races to the bottom'.^'' All jurisdictions wantto attract as much investment and employment as possible, and thismust inevitably lead to a softening of national social, environmental andconsumer protection regulation since these are deemed to be obstacles forinternationally mobile capital. 'Positive integration', be it market-correctingor market-breaking (redistributive) measures, however, is seen as politicallyunattainable internationally or as illegitimate democratically."

    " Fritz W. Scharpf, 'Mehrebenenpolitik im vollendeten Binnenmarkt' (1994) 5/4Staatswissenschaften und Staatspraxis, pp. 475-501; Fritz W. Scharpf, 'Negative and PositiveIntegration in the Political Economy of European Welfare States' in Gary Marks, Fritz W.Scharpf, Philippe C. Schmitter and Wolfgang Streeck (eds). Governance in the EuropeanUnion, (Sage, London, 1996), pp. 15-39.

    ^^ Susan Strange, The Retreat of the State: The Diffusion of Power in the World Economy(Cambridge University Press, Cambridge, 1996); Hans-Werner Sinn, 'How Much Europe?Subsidiarity, Centralization and Fiscal Competition' (1994) 41 Scottish Journal of PoliticalEconomy, pp. 85-107.

    " Giandomenico Majone (ed.). Regulating Europe (Routledge, London, 1996);Giandomenico Majone, Dilemmas of European Integration: The Ambiguities and Pitfalls ofIntegration by Stealth (Oxford University Press, Oxford, 2005).

  • 490 LEIBFRIED AND WOLF

    Nevertheless, empirically we do fmd a large amount of re-regulationof international markets. These international re-regulations do not simplycreate transnational markets or eliminate tariff and non-tariff barriers, ratherthey politically constitutionalize and increasingly regulate transnationalmarkets themselves.^*' This applies foremost to the European Single Market,in which national subsidies are regulated, cross-border mergers controlled,the environment and the consumers protected, indirect taxes (somewhat)harmonized, and currencies for many Member States supranationalized.Also beyond the EU, for example, international environmental regulationhas increased substantially in the past decades. The same holds for thestandardization of technical norms, which to a large extent has beenhanded to private parties (like standardization bodies of industry) andwas transnationalized at the same time.^' Finally, there are increasinglydispute settlements of the WTO in which the removal of tariff or non-tariffbarriers is not the only important goal but also protecting legitimate nationalenvironmental and consumer protection regulation.^* In such cases, the disputesettlement panel reports often rely on international treaties that lie outside theWTO framework.

    How does all of this affect the transformation(s) of the modern state?Do the changes summarized in Table 1 below really point to large-scaletransformations, that hollow out the Golden Age nation state and convertit into a Schumpeterian 'competitive workfare state', as Bob Jessop hasargued?^' Or is all this simply a manoeuvre by national governments to regainpower and prevail over their domestic lobbies through arcane but bindingintergovernmental agreements.'" And, by doing so, perhaps to triumph over

    ^' Christian Joerges and Christine Godt, 'Free Trade: The Erosion of National, and the Birthof International Governance' in Leibfried and Ziirn, note 9 above, pp. 93-117; see also Joergesin this issue.

    ^' Christian Joerges, 'Recht, Wirtschaft und Politik im Prozess der KonstitutionalisierungEuropas' in Markus Jachtenfuchs and Beate Kohler-Koch (eds), Europdische Integration (2ndedn, Leske + Budrieh, Opladen, 2003), pp. 183-218.

    ^' Christine Godt, 'Der Bericht des Appellate Body der WTO zum EG-Einfuhrverbot vonHormonfleisch: Risikoregulierung im Weltmarkt' (1998) 9/6 Europdisches Wirtschafts- undSteuerrecht, pp. 202-209.

    ^' Bob Jessop, 'Towards a Sehumpeterian Workfare State. Preliminary Reflections on Post-Fordist Political Economy' (1993) 40/1 Studies in Political Economy, pp. 7-39; Bob Jessop,The Future of the Capitalist State (Polity, Cambridge, 2002).

    Andrew Moravesik, 'Why the European Community Strengthens the State: DomesticPolitics and International Cooperation' (1994) Center for European Studies, Working PaperSeries 52, Harvard University; Andrew Moravesik,' Warum die Europaische Union die Exekutivestarkt: Innenpolitik und internationale Kooperation' in Klaus Dieter Wolf (ed.), Projekt Europaim Ubergang? Probleme, Modelle und Strategien des Regierens in der Europdischen Union(Nomos, Baden-Baden, 1997), pp. 211-269; Elmar Rieger, 'Politik supranationaler Integration.Die Europaische Gemeinschaft in institutionentheoretischer Perspektive' in Brigitta Nedelmann(ed.), Politische Institutionen im Wandel (Westdeutscher Verlag, Opladen: 1995), pp. 349-367;

  • EUROPEANIZATION AND THE UNRAVELLING EUROPEAN N A T I O N STATE

    Table 1. Transformations of a state? A summary of changes by four dimensions

    491

    itio

    BU

    I.

    foi

    s

    Tri

    Privatization

    Internation-alization

    Resources

    - new non-statethreats: terrorism.mafia, civil wars.organized crime- new 'produc-ers' of security:private securitycorporations

    - transnation-alization of socialthreats; transna-tional terror-ism, transborderorganized crime- increased exit-option for mobilecapital vis a visnational taxation- internation-alization andsupranationaliza-tion of securityproduction;Interpol, Europol,Eurocorps- tax harmoniza-tion

    Dimensions

    Rule of Law

    - a renewedincrease in privatelaw-making(rating agencies.norms and stand-ards, private law.lex mercatoris privatizing dis-pute settlement

    - legalization ofinternational rela-tions- internationaliza-tion of dispute set-tlement, increasein internationaleourts and disputesettlement bodies

    Legitimation

    - parliamentsbeyond the nationstate (like theEuropean Parlia-ment)- incorporationof NGOs intodecision-makingprocesses of inter-national organi-zations like theWTO and IMF

    Intervention/Welfare

    private regula-tion of markets.norms and stand-ards; strengthen-ing of privateelements in theprovision of socialsecurity; privateredistribution viafoundations andprivate eharities.record individualdonations forcharities

    - internationalregulation ofmarkets (environ-mental, consumerprotection andsocial poli-cies); EuropeanEconomic andMonetary Union;international regu-lation to controlstate subsidies(EU, WTO)

    the 'end of liberalism' with a 'new raison d'EtafV^ Do privatization andinternational cooperation, thus, strengthen the classic nation state or at least its

    Edgar Grande, 'The State and Interest Groups in a Framework of Multi-Level Decision-

    Making; The Case of the European Union' (1996) 3/3 Journal of European Public Policy,

    pp. 318-338; Stanley Hoffmann, 'Reflections on the Nation-State in Western Europe Today'

    (1982) 21 Journal of Common Market Studies, pp. 21-37.

    ' ' Theodore J. Lowi, The End of Liberalism: Ideology, Policy, and the Crisis of Public

    Authority (Norton, New York, 1969); Hennis Wilhelm Norton, Peter Graf Kielmansegg and

    Ulrich Matz (eds), Regierbarkeit. Studien zu ihrer Problematisierung, vol. I (Klett-Cotta,

    Stuttgart, 1977); Dieter Wolf Klaus, 'The New Raison D'Etat: International Cooperation

  • 492 LEIBFRIED AND WOLF

    executive wing? They could do so by spinning off subordinate tasks throughprivatization; through international cooperation, that creates and increasesinformation asymmetries via politics behind closed doors - with all of that alsoopening a window of opportunity for 'scapegoating' plus 'credit claiming'.So, do the changes summarized in Table 1 reflect less on transformations ofthe state and rather more on new instruments in a grand political strategy ofthe executive sphere of government at the national level?

    Everyday normal changes of policies may be distinguished from'transformations' of the state since the latter need to be fundamentalinstitutionally and/or procedurally. We only speak of transformations of thestate when we fmd substantial dynamics

    - in the allocative pattern of governmental tasks, that is in how organizationaland territorial change is reconfigured, and

    - in the nation-state 'corridor' within which governmental tasks wereallocated, i.e. substantial change in the range of governmental tasks or inthe overall set-up of the political system.

    Until the mid-1970s the state constellation, as outlined in Table 2,was clearly marked by a nation-oriented political configuration wherebyorganizationally private, non-state actors played a politically important roleonly in problem definition, agenda setting, and again in implementation. Thecore area of political decision-making itself was clearly the state's prerogative.Although national political systems differed, in the early stages of thepolitical decision-making process all Western industrialized democracies hadsome form of pluralist or corporatist interest group participation. These formswere important again at the end of the policy cycle when political decisionshad to be implemented, i.e. when administrations, end users, as well as partiesotherwise affected by the unintended consequences of policy, and the courtshad to be coordinated, so that the letter of the law could be converted intopractical solutions for the problems at hand. The policy itself was made bygenuine politieal institutions only - be it in parliamentary, presidential ordirect-democratic decision-making processes. Since the 1950s a 'realist'debate developed on the 'semisovereign people'." In the 1970s it culminatedin the 'end of liberalism' and in warnings about 'regulatory capture', ahegemony of interest groups in the political process." That collectively

    Against Societies?' in Mathias Albert, Lothar Brock and Klaus Dieter Wolf (eds). CivilizingWorld Politics: Society and Community Beyond the State (Rowman & Littlefield, Lanham,MD., 2000), pp. 119-132.

    " Elmer E. Sehattschneider, The Semisovereign People: A Realist's View of Democracyin America (Holt, Rinehart Winston, New York, 1960); Theodor Esehenburg, Herrschaft derVerbdnde? (DVA, Stuttgart, 1955).

    " George J. Stigler, 'The Theory of Economic Regulation' (1971) 2/1 Bell Journal ofEconomics and Management Science.

  • EUROPEANIZATION AND THE UNRAVELLING EUROPEAN NATION STATE

    Table 2. The national constellation of the 1970s

    493

    Perspective

    Organizational change Territorial change

    Problem definition /agenda-setting

    oQHU

    XI

    Policy formulation

    Implementation

    national societal andgovernmental actors (pluralism,corporatism)

    national governmental actors(government, parliament,administration, courts), directdemocracy

    national governmental actors(government, administration,courts), nationalized society(addressees of the policy andparties affected by the policy)

    actors out of national societyand from national government(in federal states sub-nationalgovernmental and socialactors), in tightly restrictedcases the influence of foreigngovernments (offer of treatynegotiations), major exception:European integration

    national governments, inrestricted circumstancesforeign governments throughtreaties and agreements; majorexception: European integration

    national governmental actors(government, administration,courts), in federal states thesubnational level; majorexception: European integration

    binding decisions were the proper domain of the state was never seriouslyquestioned then.

    Territorially domestic social actors and national governments dominatedall phases of the policy cycle in the national constellation, with only twoexceptions. First, in federal states, subnational social and government actorshad independent room for political manoeuvre. This held both for the USmodel of a 'divided federalism', in which the subnational level, the states, hadtheir own autonomous law-making, taxing and administrative competencies,and under the opposite German model of 'cooperative federalism', in whichthe widely deplored 'joint decision trap' did not hinder the autonomousarticulation of interests by the Bundesstaaten., the states as constituent units.^''The European Union is an important, second exception from nation state rule.

    " Fritz W. Scharpf, 'The Joint-Decision-Trap: Lessons from German Federalism andEuropean Integration' (1988) 66/3 Public Administration, pp. 239-278; Herbert Obinger,Stephan Leibfried and Francis G. Castles (eds). Federalism and the Welfare State: New Worldand European Experiences (Cambridge University Press, Cambridge, 2005); Herbert Obinger,Stephan Leibfried and Francis G. Castles, 'Bypasses to a Social Europe? Lessons from FederalExperience' (2005) 12/3 Journal of European Public Policy, pp. 1-27.

  • 494 LEIBFRIED AND WOLF

    especially eoncerning those policy areas that are fully supranationalized,like coal and steel, agriculture and foreign trade.^^ However, until 1973, theEuropean Communities consisted of only six and then, in 1973, nine WestEuropean countries - a fact which made Europeans think that Europeancooperation was a singular and small exception in the universe of politicalrule otherwise characterized by nation statism. Then, external impulses tonational policy-making seemed rare and, also, quite restricted. These impulsesconsisted in a small number of negotiation offers issued by other stategovernments, mainly to regulate transborder externalities together. Whethera state initiated such negotiations or concluded a treaty was a decision thatremained strictly at the national level; this is so even if we note the unevenpower structure of international relations during the cold war, an era inwhich smaller states could not always avoid compliance with the 'regulatory'ambitions of hegemonic powers nearby.

    Now, this national constellation has changed dramatically in the past threedecades, as summarized in Table 3. Two aspects of the transformations ofthe modern state are obvious. We see, first of all, a certain transformation inthe configuration of the structural arrangements between governmental tasksand competencies. Until the 1970s the presumption was: political decisionsare legitimately made at nation state level. Even a clear national teleologyexisted, which automatically considered newly emerging social problems,like environmental protection or regulation of new technology, as tasks ofthe national government. Today this presumption is much less obvious, mostimportantly for the intervention state, where in many spheres the whole policycycle, from problem definition to implementation, has a clear bias towardinternationalization. Just take one example - the regulation of domain namesin the internet never became the task of a government agency or an explicitlynational institution, but rather of ICANN, a private transnational regulatorybody. Similarly, in other dimensions of modern statehood national teleologyruns dry.

    This does not, however, result in dissolving the state and completelytransferring its tasks and competencies to other institutions or actors. Thereis no sign of a new post-national regrouping of the state's four dimensionsat another political level, be it as a federalized World State as described byOtfried Hoffe or as some kind of stripped and abridged 'workfare state',detailed in the work of Bob Jessop.^'' On the contrary, nation state structuresseem to re-form in a functionally segmented system (if not in systems) ofmultilevel governance that is characterized by divergent organizational andterritorial ranges. There is also no sign of an outright 'race toward the bottom'

    " Wallace, Wallace and Pollack, note 4 above.' ' Otfried Hoffe, Demokratie im Zeitalter der Globalisierung (C.H. Beck, Munchen, 1999);

    Jessop, note 29 above.

  • EUROPEANIZATION AND THE UNRAVELLING EUROPEAN NATION STATE

    Table 3. The dynamics of the post-national constellation

    495

    licy

    Cyc

    lein

    the

    Po

    Pha

    ses

    Problem definition /agenda-setting

    Policy formulation

    Implementation

    Perspective

    Organizational change

    privatization tendencies in'resources'and 'intervention'

    privatization tendencies in'intervention'

    privatization tendencies in'intervention' and the 'rule oflaw'

    Territorial change

    internationalization tendencies in'intervention' and 'resources'

    internationalization tendencies in'intervention' and 'legitimation'

    internationalization tendencies in'intervention' and the 'rule oflaw'

    in national regulatory regimes or of a strong convergence of policies acrossnations." Rather, very different forms and degrees of internationalization andprivatization coexist, depending on which of the four dimensions of the statewe look at. It seems that the corridor for possible institutional configurationsof the modern state is about to change.

    IV The Situation of the European Union

    How does the unravelling of the fabric of the modern nation state affect theEuropean Union? Is the EU only a transitory phenomenon soon to be absorbedby the stream of globalization effects? When we look at the 'Europeanconstellation' in Table 4 the complexity of modern state becomes even moreevident.

    Along the territorial dimension, we can read European integration as anintegral part in the process of unraveling the fabric of the modern nation state.Supranationalization and transnationalization in various policy areas clearlybelong to the processes of denationalization, which are the prime movers inthe unravelling. Especially during the 1980s and 1990s we could witness thedeepening and widening of European integration, incorporating more andmore states into the EU and transferring competencies for ever more policyareas at least to a certain extent to the supranational level.

    But that is only one side of the eoin. The other one relates to a regionalreconfiguration of the modern state in Europe. This conversion, however,

    " Herbert Obinger, 'The Dual Convergence of Welfare States' in Irene Dingeldey andHeinz Rothgang (eds), Governance of Welfare Sate Reform (Palgrave Macmillan, Basingstoke,2005, forthcoming).

  • 496

    Table

    u

    licy

    o0.(L>SiB

    wa.c

    IX

    4. The EU constellation

    Problem definition /agenda-setting

    Poiicy formulation

    Implementation

    LEIBFRIED AND WOLF

    Perspectives

    Organizational change

    strengthening of nationalgovernments vis-a-vis nationalinterest groups, pluralizationof interest group politics on thesupranational level

    combination of nationaland supranational levels,strengthening of nationalgovernments vis-a-vis theirnational interest groups.weakening of nationalparliaments

    private actors and nationaladministrations controlledby supranational institutions(Commission, Court)

    Territorial change

    depends on the policy area:supranationalization andtransnationalization, multi-levelgovernance structures

    depends on the policy area:supranationalization andtransnationalization, multi-level governance structures.variable geometry, core-Europestructures

    national administrationscontrolled by supranationalactors and by social actorswith court access; depends onthe policy area: incorporationof national policy areas into amulti-level system of Europeanlaw

    does not result in the often desired or demonized European federation butin a peculiar mix of vertical-cum-horizontal multi-level cooperation. Threecrucial aspects characterize this levels-actors complex.

    First, in its policy areas - Home and Justice Affairs, Tariff Union andMonetary Union - the EU quite clearly distinguishes between 'inside' and'outside'. This can only loosely resemble the settled territoriality of nationstates, as the EU is at least to some extent marked by 'variable geometries'. Themembers of the Schengen Agreement, Monetary Union and Single EuropeanMarket with its attendant four freedoms are not congruent and not evenidentical with the formal members of the EU. But that does not lead into anarbitrary structure: the EU can always define clearly where its organizationalborders run, be it on immigration, visas, tariffs or the four freedoms. And sincethe European Court of Justice recently denied, that international (WTO)-lawis directly applicable in the community, the landscape of a somewhat diverse,but regionally compact territorial reconfiguration emerges.

    Second, TRUDI combined a legal-institutional pecking order, a hierarchyof resources (monopoly of force and taxation) and democratic legitimationfounded on a common identity, in one national sphere. The EU reconfiguresall four dimensions in a novel and peculiar vertical-horizontal system.

  • EUROPEANIZATION AND THE UNRAVELLING EUROPEAN NATION STATE 497

    A supranational legal hierarchy differentiated by sectors that includesthe necessary mechanisms for monitoring is the base for a decentralized,horizontal (still mostly national) supply of resources (monopoly of force andtaxation) - and along with it also for sanctions. All this is underpinned bya precarious cocktail of national and supranational legitimation layers, stillstrongly challenged by national idiosyncracies. This, then, amounts to the suigeneris character of European integration.

    Third, in the European multilevel system of governance, major parts oflobbying and interest group influence - and with it important elements ofthe legitimacy of the EU political system - have shifted from the input tothe output side.^^ The supranationalization of political decision-making, thatvaries by sectors, strengthened the hand of national governments vis-a-vis'their' national interest groups and parliaments. Consequently, TheodoreJ. Lowi's 'end of liberalism' could trans-substantiate into Alan Milward's'European Rescue of the Nation State'.^' The decision-making of the Councilof Ministers behind closed doors provides for mechanisms like 'scapegoating'or 'credit claiming' to the advantage of the Member State executive. A similarboost for national governments can sometimes come from EU negotiationswith third countries. In the WTO the European Commission is the negotiator.Brussels, however, always has to report back to the Council of Ministers andany negotiation results must pass the elaborate ratification procedure of theEuropean Parliament and the 25 Member State parliaments. An internallyweak Commission, thus, can often extract additional concessions from'strong' negotiation partners - like the US Trade Representative, who isbacked by the 'fast track' procedure - to avoid a complete breakdown of thenegotiations. Together with the massive multiplication of lobbying in Brusselsand the inefficiency of strikes and demonstrations against unelected Europeanofficials, the input side has lost a lot of its direct leverage to influencepolicies in such a European structure. But, the European rule of law offersits citizen an alternative to reliance on the input side of the political system.By using their (indirect) right to litigate, which was often quite restrictednationally, the European Court of Justice offers them a place for enforcingcitizens interests against national governments."" This may not adequatelysubstitute for the absence of participation on the input side. Seen from theindividual perspective, on the output side it has the additional advantage thatit is not necessary to build or sustain an expensive organization of interestaggregation through interests groups or social movements. An experienced

    '* Rainer Eising and Beate Kohler-Koch (eds), Interessenpolitik in Europa (Nomos, Baden-Baden, 2005).

    " Alan S. Milward, George Brennan and Federico Romero, The European Rescue of theNation State (University of California Press, Berkeley, 1992).

    '"' Mark, A. Pollack, The Engines of Integration: Delegation, Agency and Agenda Setting inthe European Union (Cambridge University Press, Cambridge, 2003).

  • 498 LEIBFRIED AND WOLF

    lawyer and a good legal protection insurance will suffice. In consequence, therepresentation of social interests is individualized.

    Seen from the Member State perspective, denationalization and negativeintegration are only one side of European integration. Intimately tied to it is aregional institutional reconfiguration of the state, which amounts neither to anew European federal state, nor to a European substitute for the state, nor toa novel teleology for reconfiguring the modern state in toto. Rather, Europeanintegration involves Member States in a multilevel system of sectoralgovernance, which is - compared to the nation state - quite fiexible territoriallyand organizationally but does not turn arbitrary, falling back into an opaquemedieval situation of multiple overlapping jurisdictions, as Scharpf had oncefeared."' European integration is fully part of rational modernity.''^ Hence, thenew regional reconfiguration of stateness is open to being further developed,territorially as well as organizationally, either by deepening sectoral Europeanintegration or by territorial enlargement or by a combination of both. Thisopenness does not transform the EU into a historical political entity that canbe reversed any time. European integration may not be protected againstlimited renationalization, privatization or internationalization. But the EU andits Member States are surely not endangered by its outright dissolution.

    V The Unravelling of the State - 'E Pur Si Muove'

    Historically, modern statehood is quadriphonic and rests on resources, ruleof law, legitimation and intervention. In the Golden Age of the 1960s and1970s these components were fused in the nation state, in TRUDI. But thetransformations of the state did not end there. Since the 1980s we can observean unravelling of the state's fabric, organizationally and territorially. Tasksand competencies of the nation state were, at least in partly, transferred toother actors - organizationally especially to market actors, territorially insome sectors massively to inter-, trans- and supranational institutions.

    Materially and ideologically we cannot discern a new teleology. In reality,we cannot observe the obsolescence of the nation state, its total dissolutionor its transformation into a world state. Neither have we reached any clearnormative ideas about what will or should replace TRUDI - at least noideas of similar force. Unravelling TRUDI amounts to the state losing itspolitical monopoly and being incorporated into functionally segmentedmultilevel structures. This state does not share the fate of pre-modern-statefeudal structures. They were overrun and - but for a few marginal elements

    " Scharpf, note 34 above." Ulrich Beck and Edgar Grande, Das kosmopolitische Europa. Gesellschaft und Politik in

    der Zweiten Moderne (Suhrkamp, Frankfurt a.M., 2004).

  • EUROPEANIZATION AND THE UNRAVELLING EUROPEAN NATION STATE 499

    - thrust aside by the territorially anchored, budding absolutist state. Quite thereverse, the nation state will remain a central element in the novel multilevelgovernance structures.

    The EU is both part of, and the result of this development. Europeanintegration is one reason for the unraveling of the state's fabric and hasbecome a part of the modern state's transformation(s). It reconfigures TRUDIterritorially and organizationally, but cannot itself deliver a novel, unequivocalteleology for the unfolding alterations of the state as could the nation statein the nineteenth and twentieth centuries. Still, European integration is notmerely a time-bound, regional phenomenon, to be overrun and absorbed byglobalization. In a sense, European integration and the nation state are alike.With time, the EU increasingly will be incorporated into global multilevelstructures, sector by sector, without being replaced or dissolved.

    Today we do not have a clear, unequivocal ideal-typical account for themodern state and its characteristics. All existing characteristics turn out to betime-bound, receding into history. This holds for concepts like sovereigntyand autonomy, for the borders drawn between domestic and external affairsor, as happened earlier in continental Europe, those drawn between the stateand society. Nevertheless, this development does not result in postmodernrandomness or in a post-industrial end of all problem solving, as autopoesisincreasingly - every system always solves its own problems only - reigns.We do not experience 'the end of politics' or the impossibility of producingany public goods, be it security, the rule of law, democracy or welfare.The unravelling of the state's fabric is not the end of all binding politicaldecision-making nor do shared solutions for collective problems becomewholly unenforceable. But the unravelling confronts us with the novel, post-TRUDI constellations of modern stateness, with constellations that are muchless clear-cut, extra complex and quite fiexible - and sometimes also moreprecarious - than we have grown accustomed to under TRUDI's reign. Weshould refrain from retrospectively proclaiming halos: the public goods thenation state produced during the 1960s and 1970s were not in all cases betterand more efficient than today, and we have not witnessed a turn to the worsein everything since then. The dynamics of European integration, especially inthe 1980s and 1990s, provide the best counter-example.