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The Impact of International Institutions and Trade on Environmental Policy Convergence in Europe

Katharina Holzinger, Christoph Knill, Thomas Sommerer

First Draft

Paper presented at the ECPR Joint Sessions, Granada, 14-20 April 2005

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The Impact of International Institutions and Trade on Environmental Policy Convergence in Europe

Katharina Holzinger, Christoph Knill, Thomas Sommerer

1 Introduction1

In recent years, there is a growing and renewed interest in the study of cross-national policy convergence. There is an intensified debate on the convergence and divergence of national policies, which is closely related to research on the domestic impact of European integration (Europeanization) and globalization. Does the strong growth of economic and institutional interlinkages between nation states lead to increasingly similar policies across countries? Or is the search for convergence emerging from the domestic impact of globalization and European integration "an impossible quest" (Dimitrova and Steunenberg 2000: 201), as domestic responses to global or European challenges are strongly influenced by existing domestic structures and institutions (see, for example, Caporaso et al. 2001; Héritier et al. 2001; Knill 2001)?

Yet we still have a limited understanding of the phenomenon of policy convergence. What explains the adoption of similar policies across countries over time? Under which conditions can we expect that domestic policies converge or rather develop further apart? Why do countries converge on some policies, but not on others? In the literature, many factors have been suggested in order to account for the mixed empirical evidence of both convergence and divergence, including, for instance, the role of international organizations, regulatory competition between nation states, capacities for national policy adjustment, as well as parallel problem pressure (cf. Bennett 1991; Drezner 2001; Hoberg 2001: Dolowitz and Marsh 2000; Holzinger and Knill 2005). However, there is still a lack of systematic theoretical and empirical investigations about their actual explanatory relevance, implying that we still have limited knowledge about the causes and conditions of cross-national policy convergence.

In this article, we aim to address this research deficit. In empirical terms, we analyze, if and to what extent we can observe a convergence of environmental policies in Europe. For this purpose, we analyze the development of 40 environmental measures across 24 countries between 1970 and 2000.

1 The article strongly builds upon empirical and theoretical work carried out in the research project

"Environmental Policy Convergence in Europe (ENVIPOLCON)". Funding of this research by the European Commission within the fifth framework programme on socio-economic research is gratefully acknowledged. The ENVIPOLCON research team includes the universities of Konstanz, Nijmegen, Hamburg, Berlin (Free University) and Salzburg.

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From a theoretical perspective, we concentrate on the explanatory power of two factors often mentioned as important causes of cross-national policy convergence, namely international economic and institutional interlinkages between nation states. To what extent can these factors account for the observed patterns of environmental policy convergence or divergence?

The paper is structured as follows. In section two, we present our theoretical framework. The research design and the operationalization of variables are described in section three. In section four, we present and discuss the results of our analysis. Summary and general conclusions to be drawn from our study are part of section five.

2 Theoretical Background

The literature provides us with many potential factors that might lead to cross-national policy convergence (cf. Bennett 1991; DiMaggio and Powell 1991, Dolowitz and Marsh 2000, Drezner 2001; Hoberg 2001). Basically, these factors refer to five distinct convergence mechanisms (Holzinger and Knill 2005):

First, cross-national policy convergence might be simply the result of similar, but independent responses of different countries to parallel problem pressure (e.g. ageing of societies); i.e., policy convergence is caused by similar policy problems countries are reacting to (Bennett 1991: 231). Second, several studies emphasize convergence effects stemming from the imposition of policies. Imposition refers to constellations where countries or international organizations force other countries to adopt certain policies by exploiting asymmetries in political or economic power. Third, regulatory competition emerging from the increasing economic integration of European and global markets has been identified as important factor that drives the mutual adjustment of policies across countries. Fourth, emphasis is placed on the harmonization of national policies through international or supranational law. Countries are obliged to comply with international rules on which they have deliberately agreed in multilateral negotiations. Finally, cross-national policy convergence can be caused by communication and information exchange in transnational networks.

As we are interested in the convergence effects caused by economic and institutional interlinkages among countries, we will only refer to those mechanisms mentioned above that are actually relevant in this respect, namely, international harmonisation, transnational communication and regulatory competition.

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2.1 International Harmonization

The mechanism of international harmonization leads to cross-national convergence if the involved countries comply with uniform legal obligations defined in international or supranational law. Harmonization refers to a specific outcome of international cooperation, namely to constellations in which national governments are legally required to adopt similar policies and programs as part of their obligations as members of international institutions.

International harmonization and more generally international cooperation presuppose the existence of interdependencies or externalities which push governments to resolve common problems through cooperation within international institutions, hence sacrificing some independence for the good of the community (Drezner 2001: 60; Hoberg 2001: 127). Once established, institutional arrangements will constrain and shape the domestic policy choices, even as they are constantly challenged and reformed by their member states. This way, international institutions are not only the object of state choice, but at the same time consequential for subsequent governmental activities (Martin and Simmons 1998: 743). However, as member states voluntarily engage in international cooperation and actively influence corresponding decisions and arrangements, the impact of international harmonization on national policies constitutes no hierarchical process; it can rather be interpreted as "negotiated transfer" (Dolowitz and Marsh 2000: 15).

The scope of cross-national convergence triggered by international harmonization is restricted to those countries that are actually committed to the same international agreements or supranational regulations; i.e., to countries that are a member of the same international or supranational institution in question.

The degree of convergence caused by international harmonization is affected by two factors. First, convergence will increase with the extent to which countries are institutionally interlinked. The higher the level of common membership in international and supranational institutions among the countries, the more their environmental policies will converge. Second, convergence is affected by the obligatory potential of the international institution in question. The degree of similarity will increase with the extent to which compliance with legal obligation can actually be enforced. International institutions reveal important differences in terms of their enforcement powers. The European Union (EU) can be characterized as an institution in which such powers are comparatively well developed, given the direct effect and the supremacy of European law, the influential role of the European Court of Justice in the enforcement of Community law, the – albeit restricted – monitoring activities of the European Commission as well as the opportunity to financially sanction non-compliant member states. Against this background, the converging effects of European legislation can be expected to be higher than those of intergovernmental organizations or international regimes, where enforcement powers are less developed.

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2.2 Transnational Communication

International institutions might cause cross-national policy convergence not only by legally binding rules and decisions, but also by non-obligatory factors. This expectation follows from various theoretical arguments developed in the field of organisation sociology. As emphasised by DiMaggio and Powell (1991), frequently interacting organisations, such as national bureaucracies, tend to develop similar structures and concepts over time. Policy convergence results from the striving of organisations to increase their social legitimacy by embracing forms and practices that are valued within the broader institutional environment. In this context, the establishment of international institutions and networks plays an important role in facilitating the exchange of new policy models and regulatory innovations across national borders (Strang and Meyer 1993).

Various ways of non-obligatory convergence can be distinguished. First, states might act mimetically to copy the successful policies of other states. The demand for similarity of structure and functioning, rather than increased efficiency drives the process of cross-national convergence (DiMaggio and Powell 1991). Second, the diffusion of professional knowledge via transnational networks or "epistemic communities", who share common beliefs and perceptions over policy problems and corresponding solutions to address these problems (Haas 1992), plays an important role in facilitating the cross-national diffusion of policy concepts by deliberation and learning (Joerges and Neyer 1997).

Similar to international harmonization, convergence effects emerging from transnational communication can be expected only for those countries that are members of the same international institution or network. At the same time, the degree of convergence will increase, the higher the institutional interlinkage of countries, i.e., the more they are members of the same institutions or networks. Moreover, the degree of convergence is affected by what we refer to as "communicative potential" of the international institutions in question. This potential varies with frequency and breadth of interaction; i.e., the functional differentiation of transnational networks (Kern 2000, 267).

2.3 Regulatory Competition

According to theories of regulatory competition, countries facing competitive pressures are expected to mutually adjust their policies, hence leading to cross-national convergence. Regulatory competition presupposes economic integration among countries. Especially with the increasing integration of European and global markets and the abolition of national trade barriers, the international mobility of goods, workers and capital puts competitive pressure on the nation states to redesign domestic market regulations in order to avoid regulatory burdens restricting the competitiveness of domestic industries. The pressure arises from (potential) threats of economic actors to shift their activities elsewhere, inducing governments to adjust their regulatory standards.

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In the literature there is a broad debate about the extent to which these adjustments coincide with an upward or downward shift of regulatory levels (race to the top versus race to the bottom). While the standard expectation typically presupposes a downward shift (Hoberg 2001: 127; Simmons and Elkins 2004; Drezner 2001: 57-59), other theoretical work suggests that there are a number of conditions which may drive policy in both directions (Vogel 1995; Scharpf 1997; Kern, Jörgens and Jänicke 2000; Holzinger 2002, 2003), including, for example, the type of policy concerned (product or process standards), or the presence of other interests than business in national politics. As in this paper the analytical focus is on the degree rather than the direction of policy convergence, the decisive expectation in our context is that theories of regulatory competition predict an increase of policy similarity over time among countries exposed to competitive pressures, regardless of the regulatory level at which this convergence might occur.

Having identified the general relationship between regulatory competition and policy convergence, however, we still no nothing about the conditions under which the expected convergence effects might be more or less pronounced. In this respect, various factors restrict the scope of potentially converging countries and policies. On the one hand, potential convergence effects of regulatory competition presuppose economic integration between market economies. Even in constellations of high economic integration, no competitive pressures will emerge in and between non-market economies. This scenario applies in particular to the communist countries before 1990. On the other hand, a qualification applies to the policies for which convergence effects are predicted. Adjustments are only expected for trade-related policies, such as product or process standards. No convergence will occur for policies, which are subject to low competitive pressures from international markets. This holds true for all policies that are not directly related to products or to production processes, such as nature protection, or bird protection. It holds also true if trade-related policies are concerned, but the effects of the regulation on production costs are low. In this case they do not affect competition between industries in different countries.

As regards the degree of convergence, theories of regulatory competition generally predict that countries adjust policy instruments and regulatory standards in order to cope with competitive pressures emerging from international economic integration. The more exposed a country is to competitive pressures following from high economic integration (emerging from its dependence on trade of goods, capital and services with other countries); the more likely it is that its policies will converge to other states with international exposure. In other words, the degree of convergence depends on the level of competitive pressures to which countries are exposed.

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3 Research Design and Variables

In view of the research questions addressed in this paper, the degree of convergence of national environmental policies is conceived as the dependent variable. In this context, convergence is measured and identified by increasing policy similarity over time. Based on the previous theoretical considerations, we focus on three factors as the main independent variables that are expected to account for differences in environmental policy convergence: (1) the degree of interlinkage of countries in international institutions with obligatory potential, (2) the degree of interlinkage of countries in international institutions with communicative potential, and (3) the degree of economic interlinkage; i.e., the extent to which a country is linked to other countries by its trade relations, and hence subject to competitive pressures emerging from regulatory competition.

Figure 1: Dependent and Independent Variables

Independent Variables Dependent Variable International Harmonization obligatory potential of institutional interlinkage

Transnational Communication communicative potential of institutional interlinkage

Degree of Policy Convergence policy adoption policy instruments policy settings

Economic Interlinkage regulatory competition

3.1 Dependent Variable

Selection of Policies Items and Countries

In order to assess the degree of environmental policy convergence we rely on the dataset developed in the EU-sponsored project on Environmental Policy Convergence in Europe (ENVIPOLCON). From this dataset, we selected 40 policy items in accordance with the following criteria. First, the policies under investigation constitute a balanced sample covering all environmental media. Second, the

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policies cover the whole range of different policy types that are of particular theoretical interest. To assess the effects of regulatory competition, we included both trade-related policies (product and process standards) and policies that are not subject to competitive pressures through economic integration. To compare effects of the obligatory and communicative potential of international institutions, our sample covers not only obligatory items (for which a legally-binding standard at the international level exists), but also non-obligatory measures (where internationally harmonized rules are lacking). Third, with selection of policies, we are able to analyze convergence effects with regard to different policy dimensions, namely, the extent to which countries have developed a specific policy or not with regard to a certain problem (policy presence), the instruments applied (e.g. command-and-control regulation versus policies based on economic incentives) as well as the settings of the instruments (i.e. levels of environmental standards). The policies under investigation are listed in Annex 1.

To measure convergence, we compare the degrees of cross-national policy similarity at four points of time (1970, 1980, 1990, and 2000). The year 1970 represents the starting point of national and international environmental policy. In 1980, the first wave of laws had been passed in the more environmentally advanced countries. Moreover, various international organisations had launched environmental programmes and policies for the first time. In 1990 more or less comprehensive environmental policies had been put in place in almost all industrialised countries as well as international organisations. The year 2000, finally, represents the situation after the fall of the Berlin Wall, with growing trade relations between Western and Eastern European states, and with a number of Central and Eastern European (CEE) countries seeking membership in the EU. Therefore, according to the theories outlined above, over the last decade an overall approximation of environmental policies in Europe can be expected.

The 24 countries under investigation include the member states of the EU-15 (except Luxembourg), Norway, Switzerland, Poland, Slovakia, Hungary, Bulgaria, Romania as well as the United States, Mexico and Japan. The country selection thus includes different groups of countries with regard to the influence of EU-membership: the founding members of the EU, countries joining the EU in 1973, 1981/1986, 1995 and 2004, countries currently negotiating EU-accession, countries that are not members but closely affiliated with the EU (Norway and Switzerland) and countries not institutionally integrated or affiliated with the EU. For the collection of the data, a questionnaire was developed that was completed by environmental policy experts for each country2. The information provided by the country experts was crosschecked and compared with regard to completeness and correctness.

2 The workload as well as the conditions of payment for the country experts was defined in specific working

contracts.

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Classical Approaches to Convergence

With regard to the measurement of convergence, the classical approach is to focus on decreases of the variation coefficient (σ−convergence). This approach, however, bears certain disadvantages with regard to a sound assessment of convergence. First, as the variation coefficient is calculated on the basis of the whole sample of countries, similarity increases among country subgroups might be overlooked. It is even conceivable that one or more outliers lead to an increase in the variation coefficient, although the other countries are converging. Second, and related to this point, this approach does not allow for statements on the extent to which single countries are converging to the whole group of countries. The variation coefficient constitutes no reference point against which developments in single countries can be assessed. Third, on the basis of the variation coefficient, convergence can only be assessed for metrical, but not for nominal data. Fourth, the variation coefficient does not measure convergence effects that might result from the fact that countries adopt a certain policy.

Figure 2: National Policy Development for Limit Values for CO-Emissions from Passenger Cars, 1970-2000

Limit values: Passenger cars (CO emissions in g/km) 1970-2000

0

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1970 1980 1990 2000

FRA

GER

GRE

HUN

NOR

POR

ROM

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Coeff. Var. 0,17 0,44 1,03 0,32 Mean (g/km) 38,65 28,12 6,64 3,0 N 2 7 8 10

The following two examples taken from our dataset illustrate these points. They show the development of national environmental policies for a representative sample of ten out of our 24 countries under investigation. Figure 2 shows national changes in the regulation of limit values for CO

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emissions from passenger cars. The figure illustrates not only a clear move towards increasingly stricter standards (i.e. evidence of a race to the top rather than a race to the bottom), but also – at least by graphical impression – an increase in the similarity of national standards between 1970 and 2000. This impression, however, is partially contradicted when looking at changes in the variation coefficient. This indicator suggests a diverging development between 1970 and 1990. It is only for the period between 1990 and 2000, that we can observe a decrease in variation. Moreover, it is obvious that statements of convergence or divergence are only possible for the whole sample, but not for the performance of single countries.

A similar judgement applies for our second example that refers to limit values for industrial discharges of zinc into the surface water. Also in this case, the graphical illustration not only indicates an increase in regulatory strictness, but also in the similarity of national standards over time. Again, however, the impression of policy convergence is not confirmed by the variation coefficient that increases throughout the whole period of investigation, hence suggesting a diverging rather than converging development.

Figure 3: National Policy Development for Industrial Discharges of Zinc into Surface Water, 1970-2000

Limit values: Surface water (industrial discharges of Zinc in mg/l) 1970-2000

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4

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1970 1980 1990 2000

AUT

BUL

FRA

GER

HUN

JAP

MEX

POL

SWI

UKD

Coeff. Var. 0,00 0,43 0,71 1,20 Mean (mg/l) 5,00 4,00 2,75 2,47 N 1 3 6 10

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The Pair Approach

To overcome the above-mentioned weaknesses in the analysis of convergence, we rely on an alternative indicator that is defined on the comparison of country pairs. According to this approach, the basic unit of analysis are not countries, but country pairs. Consequently, convergence implies an increase of policy similarity between a certain pair of countries over time. The hypotheses formulated above and specified below hence refer to country pairs; i.e., the more two countries are interlinked institutionally and economically, the more their policies will converge.

To calculate pair similarity and pair convergence, for each policy, all country pairs are compared. This extends the number of cases from 24 countries to 276 country pairs (with each pair being considered only once, e.g. Austria-Belgium, but not Belgium-Austria). When comparing the presence of policies and similarities of instruments, score "1" means that two countries A and B have the same policy or the same instrument, whereas "0" means that they are dissimilar3. For setting items, by contrast, we apply a normalized metrical score based on differences between limit values, leading to a similarity scale between "1" (limit values are identical) and "0" (country pair with the most dissimilar setting values).

When summing up the similarity scores across all 40 policies, we apply a weighted scale, differentiating between the similarity scores for policy presence, instrument and setting items. The maximum similarity score is "1" for policy presence items, "2" for instrument items and "3" for similarity of settings. This weighting is based on the fact that similarity of policy settings necessarily implies that countries apply similar instruments. At the same time, similarity of instruments presumes the presence of a respective policy. Given our sample of 40 policy items, we thus arrive at a weighted similarity scale from "0 to 89" points. For a better interpretation and for reasons of comparability with other scales, these scores are transformed to percentage scales, with the maximum of 89 points corresponding to 100% similarity of environmental policies. These similarity scores can easily be transformed to convergence scores. Convergence is measured by changes in percentage points of absolute similarity between t1 and t2. In a later step, we analyze not only the whole sample of 40 items, but also the subgroups "policy presence" and "settings". For policy presence, the unweighted score ("0" or "1") is used, while for settings, we rely on the unweighted metrical score between "0 and 1". No further attention will be paid to convergence on policy instruments, as for the latter, the limited number of cases does not provide a sufficient basis for statistical analysis.

This means that by the pair-approach, we assess a type of convergence that is similar to σ−convergence, as far as we focus on the growing together of countries, regardless of the direction of

3 If both countries have no policy, they are also dissimilar by definition, as we do not have “0” on both sides,

but an "empty set" that cannot be compared. If a policy would be abolished in both countries, than non-existence of policy would be interpreted as similarity. Empirically however, this is not the case in our data set.

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the policy changes. In contrast to σ−convergence, however, the pair approach has the advantage of having a reference point for analyzing the convergence of single country pairs to the whole group. In addition, by the use of country pairs, the sample size becomes large enough for running regression models. Therefore, the data is not pooled, and difficulties commonly associated with pooling can be avoided. Moreover, an assessment of convergence is possible on the basis of nominal data and convergence effects emerging from the adoption of policies across countries are taken into account. This way, the pair approach offers an innovative and direct access to the study of sigma-convergence, measuring the increase or decrease of policy similarity between countries on the bilateral level that is the most basic one, without recourse to any aggregation.

Descriptive Analysis

The descriptive application of the pair approach is illustrated in figures 4 and 5. Figure 4 shows convergence trends for three items, namely limit values for lead in petrol, CO emissions of passenger cars and industrial discharges of zinc into surface water. While we can observe similarity increases for all of these items during the observation period, both similarity levels and similarity changes differ across policies and over time.

Figure 4: Similarity of Average Country Pairs for Selected Policies, 1970-2000

0,00%

10,00%

20,00%

30,00%

40,00%

50,00%

60,00%

70,00%

80,00%

90,00%

100,00%

1970 1980 1990 2000

Lead in petrol

C0 emissions

Zink discharges

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Moving from single policies to the aggregate level of all 40 policies under investigation, the overall impression of a manifest convergence trend is quite similar. Figure 5 shows a permanent increase of average similarity of all country pairs over time, with slight convergence during the 1970s and strong convergence during the last decade, implying that in 2000, the average country pair reaches the level of 57% similarity. Moreover, figure 5 illustrates convergence trends for five country pairs. Having a reputation for early and strict environmental regulation, Japan/Sweden has been the most similar pair in 1970 as well as in 1980. In 1990 and 2000, by contrast, the pairs with the highest similarity are Germany/Switzerland and Denmark/Netherlands.

Figure 5: Similarity of Selected Country Pairs and Average Pair, 1970-2000

0,00%

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1970 1980 1990 2000

Sim

iliar

ity P

erce

ntag

e

AVE

JAP SWE

UKDUSA

DENNED

GERSWI

HUNPOL

An overall summary of our empirical findings is provided in table 1. The table gives information about policy similarity for 276 country pairs with respect to four points of time (1970, 1980, 1990 and 2000). Moreover, similarity increases between these points are listed (indicating policy convergence). With respect to the policies, the table not only lists developments for the whole sample, but also provides results for different policy subgroups. In this respect, several findings seem of particular interest. First, convergence effects are most pronounced with regard to policy presence items followed by convergence on instruments, with convergence on settings being least developed. Second, when looking at policy types, it becomes apparent that similarity increases for trade-related policies are more pronounced than for policies not related to trade. This gap, however, is much stronger for setting items, while for policy presence items differences are very small. A similar statement applies for the

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distinction between obligatory and non-obligatory items, with similarity increases being generally stronger in the former case.

Table 1: Policy Similarity and Policy Convergence: Mean Values in % for 276 Country Pairs

Policy Similarity Policy Convergence

1970 1980 1990 2000 1970s 1980s 1990s

Pair-approach all policies (40 items) 0,02 0,11 0,27 0,57 0,09 0,16 0,30

Settings (21) 0,00 0,07 0,18 0,39 0,07 0,11 0,21

Policy instruments (12) 0,05 0,19 0,32 0,49 0,13 0,13 0,16

Presence of policy (40) 0,03 0,12 0,30 0,65 0,09 0,17 0,35

Setting trade-related (16) 0,01 0,06 0,16 0,46 0,05 0,11 0,29

Setting non trade-related (5) 0,00 0,00 0,06 0,17 0,00 0,05 0,12

Presence of policy trade-related (26) 0,02 0,14 0,34 0,72 0,12 0,20 0,38

Presence of policy non trade-related (14) 0,05 0,09 0,22 0,52 0,04 0,13 0,31

Setting obligatory (3/8/11/12) 0,02 0,13 0,27 0,54 0,12 0,15 0,26

Setting non-obligatory (18/13/10/9) 0,00 0,01 0,05 0,18 0,01 0,04 0,13

Presence of policy obligatory (3/8/13/19) 0,05 0,32 0,55 0,75 0,27 0,23 0,20

Presence of policy non-obligatory (37/32/27/21) 0,06 0,07 0,18 0,56 0,00 0,11 0,38

3.2 Independent Variables

In the following, we discuss the operationalization of independent variables related to the mechanisms identified above (international harmonization, transnational communication and regulatory competition). The set of independent variables is composed of two types of variables. Changes in similarity of policies over time are not only explained by change rates, such as the accession to international institutions or changes in the income level but also by variables that refer to absolute figures at the beginning of the decade, conceived as "potentials" that are supposed to cause convergence in the following years, such as communicative potential through membership in international institutions or the volume of bilateral trade.

Both harmonization and communication are based on the effects of international institutions. A sample of 35 institutions (see the list provided in annex 2) is used for the institutional indicators.

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Basically, there are two types of international institutions relevant in the field of environmental policy. The first type represents international environmental treaties, protocols or regimes. The harmonization effects of these institutions arise from accession: Members ratify the treaty and have to comply immediately. This implies that convergence effects from accession occur only once. The second type has these "harmonization effects through accession " as well; however, it also has "harmonization effects through membership": The institution continuously produces regulatory output that leads to enduring and steadily renewed harmonization effects. Hence, in contrast with accession effects membership in t1 will imply convergence in subsequent periods.

International Harmonization

To measure the extent to which countries are interlinked with international institutions with obligatory potential, we distinguish between two variables in order to cover both "membership effects" and "accession effects". The first variable refers to convergence effects of membership in international institutions with obligatory potential. From the international institutions relevant in the environmental field, only the EU has this opportunity of internal harmonization by adopting rules that are obligatory for its members. Hence, we use a dummy variable of EU membership to test the following hypothesis:

(H 1.1): If two countries are member of the EU in t1, the environmental policies of both countries will convergence in the following period

The second variable takes account of the "accession effects". To measure these effects, we collected data on the membership of countries in the above-mentioned 35 international organizations and regimes. To grasp differences in their potential convergence effects, the institutions are weighted in two ways. First, we consider differences in their encompassingness, i.e., the number of policy areas, the scope of environmental problems, as well as the relative importance of environmental issues compared to other problems covered by the institution in question. Second, we differentiate between the institutions' obligatory potential. We distinguish three types of international law (supranational law, international hard law and international soft law) and four levels of monitoring (existence of courts, specialized monitoring agencies, reporting duties of member states, traditional instruments of diplomacy) in order take account of the fact that institutions might differ with respect to their capacity to enforce the compliance with their rules. The changes in this weighted membership score between t1 and t2 are taken as a proxy for convergence effects through accession to international institutions. The exact calculation of the indices can be found in annex 3.

(H 1.2): The higher the score of common institutional accession (weighed by obligatory) potential of a country pair from t1 to t2, the more the environmental policies of both countries will converge towards each other during the same period

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Transnational Communication

Potential effects of international institutions on the convergence of national policies are not restricted to the adoption of legally binding rules. Rather these institutions represent an arena for communication and information exchange among their members – an aspect that can trigger cross-national convergence by itself and independent of an institution's regulatory output. These institutional effects that exceed effects of harmonization are included in the variable "communication effects through membership". With this variable, we grasp effects of membership in international institutions in t1 on policy convergence between t1 and t2. In contrast to harmonization, accession effects are not considered in a separate variable. This is based on the assumption that convergence effects emerging from transnational communication will not unfold immediately with accession, but become relevant only after a certain period of membership.

The variable is based on membership data of the international institutions listed in annex 2. Similar to the operationalization of accession effects in the case of international harmonization, we rely on weighted institutional membership data. First, we again differentiate between levels of institutional encompassingness as outlined above. Second, we consider the length of a country pair's membership, assuming that convergence effects of transnational communication increase with membership duration. Third, we include four additional indicators to grasp the communicative potential of an institution, namely the frequency of annual meetings of national representatives, the number of organisational bodies where national representatives meet, the existence or non-existence of permanent national representatives and the size of permanent staff of the institution in question4 (see annex 3).

(H 2): The higher the score of common institutional membership (weighed by communicative potential) of a country pair in t1, the more the environmental policies of both countries will converge towards each other in the following period

Regulatory Competition

Theories of regulatory competition commonly refer to the trade figures as a proxy for the economic interlinkage between countries that is supposed to lead towards an increase in policy similarity over time. Trade flows are usually captured by an index of trade openness. The index based on a country's import and export figures divided by the size of its internal market (size of GDP). This approach, however, has often been criticized, as capturing nothing more than the difference between large and small states.

4 Due to constraints in data accessibility, these indicators are based on the current state of the institutions in

question; i.e. we do not consider potential changes, for instance in staff size or frequency in meetings, over time.

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For the pair-approach, a different type of trade data is used, namely bilateral trade flows. We therefore are able to better capture the competitive situation between two national economies. In so doing, we add the absolute figures for import and export flows for each country pair, relying on trade data from the OECD statistical compendium. We include only trade flows between market economies, as trade between non-market economies (e.g. CEE countries before the 1989) is not expected to unfold effects focused upon by theories of regulatory competition.5

(H 3): The higher the trade flows between a country pair in t1, the more the environmental policies of both countries will converge towards each other in the period between t1 and t2

Control Variables

It is the central objective of this article to analyze the extent to which international economic and institutional interlinkages among countries lead to similarity increases in their environmental policies. In focusing on these factors, however, we do not imply that other convergence causes might not be relevant. In the following, we therefore discuss other explanatory factors of convergence mentioned in the literature. This way, we are able to make a more comprehensive judgment about the relative explanatory power of the international convergence causes in which we are primarily interested.

A first variable can be derived from the theoretical literature on policy diffusion, policy transfer and policy learning (cf. Holzinger and Knill 2005, Simmons and Elkins 2004). In these theories, emphasis is placed on two factors that facilitate the transfer and emulation of policies, hence leading to increases in cross-national policy similarity over time, namely cultural ties between countries (e.g. in terms of language or religion) and geographical proximity. These factors are expected to work even in the absence of strong international institutional interlinkages between countries.

One important advantage of the pair approach is the possibility to directly include aspects of cultural similarity and geographical proximity in the quantitative analysis. Both aspects are assessed in a variable that is based on the sum of three different indicators: (1) the existence of a common border between a country pair, (2) the sharing of a common language and (3) the existence of common historical and religious tradition, expressed by the similarity of religion for each country pair. We conceive this variable as static, assuming that cultural ties and geographic proximity constitute highly stable factors that are not subject to far-reaching changes over time (see annex 3).

(H 4): The higher cultural similarity between a country pair the more the environmental policies of both countries will convergence towards each other

5 Instead of focusing on absolute values of trade flows, one could also think of relying upon changes in trade

figures over time. However, as the empirical correlation between both types of data is very high (r around .90), we only consider absolute data.

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A second control variable refers to the well-documented relationship between the level of economic development of a country and the comprehensiveness and strictness of its environmental policy. In theoretical terms, this relationship is often emphasized by reference to the Kuznets curve. It is expected that there is a u-shaped relationship between per capita income (as a measure of economic development) and environmental quality. For the pair approach, we take the income figures of the poorer country in order to measure the economic development of a country pair. Data on GDP per capita is taken from the OECD statistical compendium. In addition, we consider changes in income levels over time.

(H 5.1): The higher the income level of the poorer country in a country pair in t1, the more the environmental policies of both countries will convergence towards each other in the following period

(H 5.2) The higher changes in income level of the poorer country in a country pair between t1 and t2, the more the environmental policies of both countries will convergence towards each during the same period

A final control variable to be considered refers to the existence of domestic political pressures towards a comprehensive and stringent environmental policy. To measure this pressure, one can conceive of many indicators, including, for instance, the number of environmental organizations or the public opinion data on environmental awareness. In view of their important role in bringing about political changes in domestic environmental policy, we focus on the political influence of green parties. Political influence of green parties can also be seen as a very general proxy for environmental problem pressure that is otherwise difficult to grasp for environmental policy in general. The influence of green parties is measured by three aspects, electoral success, membership in parliament, and participation in government (see annex 3). A high score is attributed to a country pair, if green parties are equally highly influential in both countries. We consider not only absolute levels of influence, but also changes in green party influence over time.

(H 6.1): The higher the influence of green parties in a country pair in t1, the more the environmental policies of both countries will converge towards each other in the following period

(H 6.2): The higher the changes in the influence of green parties in a country pair between t1 and t2, the more the environmental policies of both countries will convergence towards each other during the same period

Finally, the effects of pre-existing similarity of polices on convergence in later periods will be investigated. A list of all independent variables and their descriptive statistics is given in table 2.

19

Table 2: Independent Variables

Mechanism Variable Model Mean Std. dev Min Max Corr.

1970s 0,04 0,19 0,00 1,00 - 1980s 0,10 0,30 0,00 1,00 -

Common EU-Membership

1990s 0,20 0,40 0,00 1,00 - 1970s 9,93 4,56 0,00 25,43 0,81 1980s 13,60 7,22 0,00 32,05 0,81

International Harmonization

Common Accession to international institutions, weighted by Obligatory Potential 1990s 21,82 9,87 2,25 41,65 0,96

1970 17,19 7,31 6,53 34,12 0,96 1980 44,16 15,48 13,05 75,69 0,90

Transnational Communication

Common Membership in International Institutions, weighted by Communicative Potential 1990 78,07 26,19 22,93 124,82 0,84

1970 470323,10 1264901,87 0,00 10583918 0,80 1980 2561096,36 6663802,46 0,00 52105439 0,87

Regulatory Competition

Bilateral Trade Data

1990 5783849,95 14614787,54 0,00 137000000 0,95

1970 7453,63 6053,53 1158,00 23446,00 0,74 1980 9883,70 7893,28 1329,00 27672,00 0,71

Income level GDP/capita Similarity

1990 12089,06 9764,62 1531,00 38713,00 0,70 1970s 2430,07 1988,54 171,00 7926,00 0,43 1980s 2205,36 2018,22 -95,00 11041,00 0,42

Economic Development

Change in Income Level GDP/capita Similarity

1990s 2177,49 2449,80 -302,00 10073,00 0,73

Social Emulation Cultural Similarity All 0,64 0,76 0,00 3,00 -

1970 0,00 0,00 0,00 0,00 - 1980 0,02 0,15 0,00 1,00 -

Influence of Green Parties

1990 0,41 0,71 0,00 2,00 - 1970s 0,02 0,15 0,00 1,00 - 1980s 0,39 0,71 -1,00 2,00 -

Political Pressure

Change Influence of Green Parties

1990s 0,10 0,87 -2,00 3,00 -

1970 2,28 3,58 0,00 21,35 - 1980 11,39 9,91 0,00 37,89 -

Pre-existing Similarity

Policy Similarity of All Policy Items

1990 27,21 14,67 2,25 60,60 -

4 Model and Results

4.1 Model and Estimation

Three cross-sectional models structure the following analysis of policy convergence, one for each decade of the observation period from 1970 to 2000. Each cross-section includes observations on 276 country pairs. We apply simple regression models with standard OLS estimations. As introduced above, the dependent variable for all models is the change rate of policy similarity from the beginning of the decade to its end, indicated in percentage points. Starting with the most general dependent

20

variable that includes a representative sample of 40 environmental policy items, this model is complemented by ten other dependents for diverse subgroups of policies.

Through the inclusion of nine independent variables, we hope to cover all major explanatory mechanisms. A more serious problem for this type of analysis is found in multicollinearity of independent variables that may occur in various contexts. Trade figures, for example, correlate with EU-membership, and wealthier countries are assumed to be institutionally interlinked to a higher degree. Although correlations in the dataset are not particularly high (from .01 to .6), the variance inflation factors indicate significant problems for a stable estimation of coefficients. This problem is solved by the orthogonalization of those independent variables that are correlated to a significantly high degree. Based on a two-step regression approach and in accordance with theoretical considerations, explanatory variables are brought into a hierarchical order (figure 6). For subordinate variables, only the unstandardized residual from bivariate regression with their respective higher-ranking variable is included in the equation. The common effect is entirely attributed to the variable higher in ranks. The orthogonalization has to be taken into account for the interpretation of coefficients; for example, only those effects are captured by the residualized trade variable that go beyond the effect of common EU-membership. The correlation of the original variables with their residuals can be seen in the last column of table 2.

Figure 5: Orthogonalization of Independent Variables

21Table 3: Regression Results

Presence of policies Settings Mechanism

Variable All PoliciesAll Trade- Non-trade

Related related Obligatory Non-

obligatoryAll Trade- Non-trade

Related related Obligatory Non-

obligatory

- - - - -Constant -** ** -** ** ** ** ** -** -** -** -** EU-Membership ,251** ,272** ,287** -,045 ,253** ,134** ,248** ,243** - ,185** ,167 Harmonization Accession to Institutions ,255** ,224** ,245** -,080 ,289** ,062 ,254** ,257** - ,275** -,009

Transnational Communication Institutional Membership ,372** ,409** ,386** ,151** ,386** ,209** ,288** ,294** - ,310** ,004

1970s

Regulatory Competition Bilateral Trade -,052 -,017 -,024 ,040 ,013 -,004 -,096* -,100* - -,079 -,065Social Emulation Cultural Similarity ,067 -,015 ,001 -,094 ,086* -,104** ,255** ,298** - ,259** ,058

GDP per Capita ,436** ,436** ,432** ,042 ,364** ,306** ,169** ,070 - ,092* ,251** Income Level Changes in GDP ,086* ,058 ,012 ,225** ,116** ,038 ,148** ,155** - ,101** ,177** Existence of Green Parties - - - - - - - - - - -Political Pressure Changes Green Parties -,055 -,094* -,101* ,013 -,084* -,112* -,005 -,067 - ,049 -,148**

R² (corr) ,46 ,45 ,44 ,07 ,47 ,12 ,36 ,35 ,00 ,34 ,09

N 276 276 276 276 -** -** 276 276 276 276 276

- - - Constant -** ** -** -** -** ** ** -** -** -** -**

EU-Membership ,094** ,077* ,008 ,238** ,099* ,035 ,076 ,104** ,070 ,117** -,086 Harmonization Accession to Institutions ,320** ,364** ,357** ,097* ,345** ,260** ,232** ,220** ,253** ,133** ,267**

Transnational Communication Institutional Membership ,515** ,536** ,522** ,159** ,378** ,492** ,349** ,359** -,021 ,429** ,004 Regulatory Competition Bilateral Trade -,021 -,091* -,081 -,058 -,248** ,057 ,112** ,128** ,094 ,104** ,065 Social Emulation Cultural Similarity ,158** ,110** ,104** ,043 ,190** ,013 ,254** ,237** ,061 ,169** ,266**

GDP per Capita ,013 ,037 ,117** -,236** -,001 ,067 -,018 -,036 -,150** -,014 -,025Income Level Changes in GDP -,120** -,116** -,072 -,168** ,011 -,177** ,011 ,030 -,114** -,029 ,059Existence of Green Parties ,090* ,034 ,080* -,149** ,032 ,026 ,158* ,215** -,035 ,069 ,229** Political Pressure Changes Green Parties -,064 -,108** -,062 -,174** -,038 -,126** 0,95* ,176** -,127** ,137** -,042

R² (corr) ,46 ,47 ,45 ,19 ,36 ,36 ,39 ,46 ,10 ,33 ,22

1980s

N 276 276 276 276 276 276 276 276 276 276 276

- - - Constant -** ** -** ** ** -** -** -** -** -** -**

EU-Membership -,099* ,017 -,050 ,142** ,120** -,092 -,116** -,126** ,076 -,014 -,191** Harmonization Accession to Institutions ,508** ,432** ,378** ,311** ,380** ,360** ,414** ,404** ,214** ,373** ,240**

Transnational Communication Institutional Membership -,569** -,458** -,458** -,062 -,363** -,324** -,518** -,528** ,296** -,510** -,235**Regulatory Competition Bilateral Trade -,078* -,099* -,048 -,113* -,144** -,005 -,012 ,011 -,124** -,123** ,139**Social Emulation Cultural Similarity -,076 -,091* -,066 -,063 -,131** -,008 -,049 ,065 -,066 -,115** ,069

GDP per Capita -,006 ,004 -,195** ,410** -,212** ,221** ,159** ,129* ,317** ,191** ,034 Income Level Changes in GDP ,052 ,011 ,050 -,082 ,094* -,080 ,163** ,128** ,005 ,271** -,069 Existence of Green Parties ,060 ,117** ,097** ,056 ,047 ,129** -,129 -,137** ,088 -,145** -,026 Political Pressure Changes Green Parties ,099** ,184** ,090** ,210** ,181** ,093 -,042 -,057 ,109* -,005 -,071

R² (corr) ,55 ,43 ,44 ,20 ,45 ,24 ,35 ,34 ,23 ,38 ,16

1990s

N 276 276 276 276 276 276 276 276 276 276 276

** = significant at the level of p< 0,05 * =significant at the level of p< 0,10. Standardized coefficients for OLS-estimation, with partially orthogonalized independent variables

22

4.2 Results

Table 3 presents the results of the regression analysis. The models show satisfying results for the overall explanation of variance. For the models in the first column, referring to the whole 40-item sample, corrected R² is between .46 and .55. Furthermore, the explanatory potential does not vary strongly over time and is rather similar for most subgroup analysis.

International Harmonization

While international harmonization is generally of great importance across all explanatory models, differences exist with respect to the effects of membership and accession. The general impact of EU membership is strongly positive only for the 1970s. The effects of accessions to international institutions, by contrast, are of high and steadily increasing relevance over the whole observation period.

With regard to EU-membership, explanatory relevance varies not only over time, but also across different subgroups. The decrease of the EU-membership effects (strong in the 1970s, rather modest in the 1980s and even negative effects for the 1990s) can to some extent be attributed to the fact membership effects were outweighed by the effects of many EU accessions during the last two decades of observation – an aspect that is also supported by the increase of accessions effects during the respective period. While for the 1970s, the increasing environmental activities of the EU caused strong convergence effects for its members at that time, these effects became relatively less important in the subsequent periods, given the far-reaching convergence effects induced by the need of accession countries to comply with the environmental acquis of the Community. Looking at policy subgroups, two patterns are of interest. First, effects on trade-related policies and settings were rather strong for the 1970s, but decreased during the subsequent periods. During the same time, effects on items not related to trade strongly increased, indicating the maturing of EU environmental policy as a policy area in its own right, pursuing objectives beyond mere market integration. Second, effects of EU membership on policy settings are even negative for the decade of the 1990s. This development might be the result of an overall change in governance patterns of EU environmental policy that is characterized by a shift from detailed command-and-control regulation towards policies that leave the member states much more leeway for compliance.

In contrast with EU-membership, the explanatory relevance of accession to international institutions is very strong and even growing over time. Starting with a standardized coefficient of .255 for the 1970s and .32 for the 1980s, the effect is even stronger for the 1990s (.508), representing the strongest positive effect across all models and variables. These figures include effects of the common accession to the EU. However, they cannot only be traced to this phenomenon, but also result from the spread of

23

environmental regimes and organizations starting in the early 1970s. The strong increase during the 1990s is the result of a second weave of international environmental activism that fostered the development of new international agreements around the 1992 UN-conference in Rio. An even more important effect can be ascribed to the transformation process in the former communist CEE countries. This process coincided with a process of catching up regarding their degree of international institutional interlinkage.

Transnational Communication

Our regression results indicate not only a strong convergence effects resulting from international harmonization, but also provide support for the expected impact of communication and information exchange in transnational networks. Common membership in international institutions has an effect on cross-national policy convergence that goes beyond the influence of international harmonization. Transnational communication that exceeds EU-effects (the variable is orthogonalized) has a positive effect on policy convergence for the 1970s and the most pronounced effect for the 1980s.

With regard to policy subgroups, two aspects are of particular interest. First, transnational communication plays a prominent role in order to account for the convergence in the presence of non-trade-related policies between 1970 and 1990, while most other explanatory variables are not significant for that period. Second, the variable is also highly relevant when it comes to the explanation of convergence effects in the presence of non-obligatory policies.

Interpretation is more difficult, however, for the period of the 1990. Coefficients turn from highly positive to highly negative ones (-0.57 for the whole item sample). We find negative coefficients across all item subgroups, except non-trade-related settings. A possible explanation for these striking changes in the effects of transnational communication can be seen in the combination of two developments. On the one hand, it is conceivable that countries pairs with strong communicative interlinkages, due to saturation effects, converged to a lesser extent during the 1990s than in earlier periods. On the other hand, country pairs characterized by weak communicative interlinkage strongly converged during the 1990s. This holds true in particular for the CEE countries in which convergence was driven by harmonization effects emerging from the accession to international institutions. Consequently, the negative coefficient does not mean that country pairs with a high score on communicative interlinkage diverged during the 1990s.

What can be said on the explanatory potential of this variable in general? Obviously, it provides evidence on institutional effects beyond harmonization. However, a direct attribution of these effects to voluntary processes of learning, policy transfer or diffusion is rather difficult, as this would imply that communication effects should be particularly pronounced for items that are either non-obligatory or not related to trade. As shown in table 3, this is actually not the case. However, though communication effects are partially stronger for other item subgroups, it should not be overlooked that

24

they are the most important explanatory factor in order to account for similarity increases for non-obligatory and non-trade-related items. Moreover, it need not constitute a contradictory finding that transnational communication plays a very important role for the convergence obligatory policies. For instance, it is rather plausible that policies adopted at the level of the EU might receive broader international attention, hence fostering the spread of these policies also between those countries that are not (yet) EU member states6.

Regulatory Competition

In contrast with the other variables analyzed so far, the expected convergence effects through regulatory competition are hardly confirmed by our findings which are thus well in line with results found in other studies (cf. Drezner 2001; Simmons/Elkins 2004). Looking at the results for the whole item sample, policy convergence throughout the whole observation period cannot be explained by trade effects that go beyond effects of EU-membership. This picture is basically confirmed for trade-related items, a subgroup where convergence effects are expected to be particularly pronounced. However, a significant positive effect is only found for the convergence of trade-related settings during the 1980s.

A possible explanation for the limited explanatory relevance of regulatory competition lies in the fact that potential competition effects were anticipated by the involved countries and subsequently reduced by international harmonization. This interpretation is supported by our descriptive results, showing that convergence was much stronger for trade-related rather than non-trade-related items. The fact that overall the most negative effects of regulatory competition are found for obligatory polices underpins this argument.

Control Variables

Our findings show that more than the variables mentioned above contribute to the explanation of policy convergence in the environmental field. As shown in table 3, social emulation constitutes an influential mechanism in that respect. Although for the whole item sample, the explanatory power of cultural similarity between country pairs is clearly lower than for the institutional variables, especially for the 1980s there is a significant positive effect on convergence for those country pairs that are culturally interlinked. Positive effects can also be observed for most policy subgroup models in the 1980s as well as for setting items in the 1970s, with the effect on settings being higher than that for policies.

The strong effects of cultural similarity during the 1980s are observed in a period that is characterized by a strong expansion of environmental policies, both at the European and the national level. It is well

6 Until 1990, only 30 percent of all country pairs shared EU membership.

25

conceivable that this dynamic development particularly inspired countries to transfer and copy innovative policies from other countries. This interpretation is supported by the fact that for the period of the 1990s (which is generally seen as an era of environmental policy stagnation) cultural similarity is a hardly relevant causal factor behind convergence (positive effects disappear in all models). This development goes along with increasing importance of international institutions.

With regard to the impact of economic development, we found support for the hypothesis that a high-income level leads to convergence. We observe positive income effects that go beyond effects of institutional interlinkage. However, these positive effects observed for the whole item sample and for the absolute level of income as well as for income growth rates can only be found for the period of the 1970s. Positive effects are found across all dependent variables, and income figures play an important role especially for convergence on non-obligatory policies and settings.

During the 1980s and 1990s, where no significant influence of the absolute income level can be stated for the whole item sample, effects of international harmonization increasingly substituted the influence of wealth. For some subgroup models, we even find negative coefficients, mainly in models for the presence of policies. This evidence can be linked to the fact that for some countries in our data set (e.g. Hungary), we found a surprisingly encompassing development of environmental policies. Moreover, wealthy and pioneering countries like Japan and the USA did not keep pace with the policy development at the EU level. In the models for convergence between 1990 and 2000, income seems to play only a role for the convergence of settings and non-trade-related and non-obligatory items, indicating that for more recent and far-reaching innovations in environmental policy, economic development may again play the role of a complementary convergence factor.

Finally, also the expectations on the influence of political pressure on cross-national policy convergence can be partially confirmed. The existence of green parties and their increasing influence had a significant positive effect on increases in policy similarity during the 1990s. Effects are more pronounced when it comes to the convergence on policy presence items and non-trade-related setting items. For the latter, particularly the increasing electoral success from 1990s to 2000 is positively linked to convergence. Thus, political pressure from environmentalism seems to be a complementary mechanism that influences cross-national policy convergence in recent years. The lack of effects during earlier decades is hardly surprising, given the fact that until the mid-eighties, green parties hardly existed in the countries under study.

The Impact of Pre-existing Similarity of Policies

For some variables discussed so far, we saw that their effects seemed to change for the period of the 1990s. A confirmation for this impression is shown in the regression models (table 4), in which we analyze the effects of pre-existing similarity on policy convergence. For the 1970s, there is a strong positive relationship between absolute similarity and change rates of policy similarity: Those country

26

pairs that already had a high degree of similarity of their environmental policies subsequently converged stronger towards each other than country pairs that have been more dissimilar. Over time, this effect decreases. For the 1990s, the negative sign shows that convergence is strongly influenced by a process of catching-up; those countries that have been dissimilar before show much higher convergence rates. However, this does not mean that highly similar countries diverged.

Table 4: Effects of Pre-existing Policy Similarity on Convergence

1970s 1980s 1990s

Policy similarity t-1 ,33** ,03 -,59**

R² (corr) ,11 ,00 ,34

N 276 276 276

** Significant at the level of p< 0,05; standardised coefficients for OLS estimation

This turn can be ascribed to the fundamental changes in CEE countries and Mexico. However, this interpretation can be advanced in interpreting this change in the pattern of convergence as a consequence of saturation effects: convergence between some countries already reached a high level in the 1980s (e.g. for Germany and Switzerland, as shown in figure 5 above). This development can explain some changes in coefficients and complements the image of a process of catching up (beta-convergence) during the 1990s. At the same time this finding supports our approach of investigating convergence developments for different time periods.

5 Conclusion

In view of still lacking systematic theoretical and empirical studies on cross-national policy convergence, in this article an attempt was made to assess and explain convergence for an entire policy field, namely environmental policy. We analyzed the development of 40 policy items over a period of thirty years. We concentrated on the analysis of sigma-convergence, measuring the extent to which domestic policies move towards each other over time. No emphasis was placed on potential changes of regulatory levels (i.e. the direction of convergence). For the assessment of sigma-

27

convergence, a new approach was developed that enables us to measure similarity changes between country pairs.

Our data reveal an impressive development of steadily growing policy convergence throughout the observation period, with divergence being observed only for single policies and few country pairs. The most significant increase is found for the period of the 1990s. Convergence with regard to the presence of policies is more pronounced than for policy settings or policy instruments. At the same time, convergence on trade-related or obligatory items is higher than for non-trade-related or non-obligatory items.

With regard to the explanation of these findings, harmonization effects emerging from the accession of countries to international institutions turned out to be a very powerful factor. A further, albeit less important convergence effect emerges from the impact of EU-membership. In addition, the models showed that institutional influence goes beyond mere harmonization effects. We found significant institutional membership effects that can be theoretically related to processes of transnational communication. While institutions clearly matter for convergence in environmental policy, the same cannot be stated for the influence of regulatory competition that plays a very minor role in explaining the observed convergence patterns. This is in line with empirical findings from other studies.

Although in an overall perspective, harmonization and communication turned out to be the most influential factor behind convergence, we found evidence for complementary effects of other variables. While for the 1970s, important convergence effects can be traced to levels of economic development, cultural similarity played an influential role for policy convergence during the 1980s. In the 1990s, by contrast, political pressures (measured by the electoral success of green parties) were observed as a driving force behind convergence of environmental policy.

Our analysis furthermore provides evidence for the fact that over time a change in convergence patterns took place. While in the beginning of the observation period, there was a strong positive relationship between existing policy similarity and convergence, the picture is exactly the opposite for the last decade under investigation. This finding can be traced to the combined effects of two developments, namely possible saturation with regard to the further convergence of already very similar countries and catching-up effects in the transformation countries under study.

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29Annex 1: Overview over the Dependent Variable

Presence of policies Settings Obligatory Non-obligatory Obligatory Non-obligatory

No. Media Policy item All Policies All Trade-

relatedNon-

Trade-related

70 80 90 00 70 80 90 00

All Trade-related

Non- Trade-related

70 80 90 00 70 80 90 00

1 Air Sulphur content in gas oil ● ○ ○ ○ ○ ○ ○ ● ● ● ● ● ● 2 Lead in petrol ● ○ ○ ○ ○ ○ ○ ● ● ● ● ● ● 3 Passenger Cars NOx emissions ● ○ ○ ○ ○ ○ ○ ● ● ● ● ● ● 4 Passenger Cars CO emissions ● ○ ○ ○ ○ ○ ○ ● ● ● ● ● ● 5 Passenger Cars HC emissions ● ○ ○ ○ ○ ○ ○ ● ● ● ● ● ● 6 Large Combustion Plants SO² emissions ● ○ ○ ○ ○ ○ ○ ● ● ● ● ● ● 7 Large Combustion Plants NOx emissions ● ○ ○ ○ ○ ○ ○ ● ● ● ● ● ● 8 Large Combustion Plants Dust emissions ● ○ ○ ○ ○ ○ ○ ● ● ● ● ● ● 9 Water Coliforms in bathing water ● ○ ○ ○ ○ ○ ○ ● ● ● ● ● ● 10 Hazardous substances in detergents ▲ ○ ○ ○ ○ ○ ○ 11 Efficient use of water in industry ○ ○ ○ ○ ○ ○ ○ 12 Industrial discharges in surface water Lead ● ○ ○ ○ ○ ○ ○ ● ● ● ● ● ● 13 Industrial discharges in surface water Zinc ● ○ ○ ○ ○ ○ ○ ● ● ● ● ● ● 14 Industrial discharges in surface water Copper ● ○ ○ ○ ○ ○ ○ ● ● ● ● ● ● 15 Industrial discharges in surface water Chromium ● ○ ○ ○ ○ ○ ○ ● ● ● ● ● ● 16 Industrial discharges in surface water BOD ● ○ ○ ○ ○ ○ ○ ● ● ● ● ● ● 17 Soil Soil protection ○ ○ ○ ○ ○ ○ ○ 18 Contaminated sites policy ▲ ○ ○ ○ ○ ○ ○ 19 Waste Waste recovery target ○ ○ ○ ○ ○ ○ ○ 20 Waste landfill target ○ ○ ○ ○ ○ ○ ○ 21 Glass reuse/recycling target ● ○ ○ ○ ○ ○ ○ ● ● ● ● ● ● 22 Paper reuse/recycling target ● ○ ○ ○ ○ ○ ○ ● ● ● ● ● ● 23 Promotion of refillable beverage containers ▲ ○ ○ ○ ○ ○ ○ 24 Voluntary deposit system beverage containers ○ ○ ○ ○ ○ ○ ○ 25 Noise Noise emissions standard from lorries ● ○ ○ ○ ○ ○ ○ ● ● ● ● ● ● 26 Motorway noise emissions ● ○ ○ ○ ○ ○ ○ ● ● ● ● ● ● 27 Noise level working environment ● ○ ○ ○ ○ ○ ○ ● ● ● ● ● ● 28 Resources Electricity from renewable sources ▲ ○ ○ ○ ○ ○ ○ 29 Recycling construction waste ○ ○ ○ ○ ○ ○ ○ 30 Climate Energy efficiency of refrigerators ▲ ○ ○ ○ ○ ○ ○ 31 Electricity tax for households ● ○ ○ ○ ○ ○ ○ ● ● ● ● ● ● 32 Heavy fuel oil levy for industry ● ○ ○ ○ ○ ○ ○ ● ● ● ● ● ● 33 CO² emissions from heavy industry ▲ ○ ○ ○ ○ ○ ○ 34 Nature Forest protection ▲ ○ ○ ○ ○ ○ ○ 35 General Eco-Audit ○ ○ ○ ○ ○ ○ ○ 36 Environmental impact assessment ○ ○ ○ ○ ○ ○ ○ 37 Eco-labelling ○ ○ ○ ○ ○ ○ ○ 38 Precautionary principle: reference in legislation ○ ○ ○ ○ ○ ○ ○ 39 Sustainability: reference in legislation ○ ○ ○ ○ ○ ○ ○ 40 Environmental/ sustainable development plan ○ ○ ○ ○ ○ ○ ○ N 40 40 26 14 3 8 13 19 37 32 27 21 21 16 5 3 8 11 12 18 13 10 9

○ = Presence of Policy ▲ = Policy Instrument ● = Setting

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Annex 2: List of International Institutions

• European Union (EU) • European Economic Area (EEA) • European Free Trade Association (EFTA) • World Trade Organization (WTO / GATT ) • Council of Europe • Comecon • Organisation for Economic Cooperation and Development (OECD) • UN Economic Commission for Europe (UN-ECE) • Organization for Security and Cooperation in Europe (OSCE) • European Banc of Reconstruction and Development (EBRD) • World Health Organization (WHO) • United Nations Environmental Programme (UNEP) • Food and Agriculture Organization (FAO) • International Union on the Conservation of Nature (IUCN) • Convention on Environmental Impact Assessment in a Transboundary

Context(Espoo Conention), Espoo • Convention on Long-Range Transboundary Air Pollution (LRTAP), Geneva • United Nations Framework Convention on Climate Change (UNFCCC), New York • Vienna Convention for the Protection of the Ozone Layer, Vienna, including the

Montreal Protocol on Substances that Deplete the Ozone Layer, Montreal • Convention on the Control of Transboundary Movements of hazardous Wastes and

their Disposal (Basel Convention), Basel • Convention on the Transboundary Effects of Industrial Accidents, Helsinki • European Agreement concerning the International Carriage of Dangerous Goods by

Road (ADR), Geneva • Convention on Biological Diversity (CBD), Nairobi • Convention on the Conservation of Migratory Species of Wild Animals (CMS), Bonn • Convention on International Trade in Endangered Species of Wild Fauna and Flora

(CITES), Washington, DC • Convention on Wetlands of International Importance especially as Waterfowl Habitat

(Ramsar Convention), Ramsar • Convention on the Protection and use of Transboundary Watercourses and

International Lakes (ECE Water Converntion), Helsinki • Alpine Convention • Bern Convention (The Convention on the conservation of European wildlife and

natural habitats) • Barcelona Convention (The Convention for the Protection of the Marine Environment

and the Coastal Region of the Mediterranean) • International Commission for the protection of the Rhine (ICPR) • International Commission for the protection of the Danube River (ICPDR) • International Commission for the protection of the Odra (IKSO) • Commission Internationale pour la Protection de la Meuse (CIM) • Commission Internationale pour la Protection de l'Escaut (CIPE) • Commissions Internationale pour la Protection de la Moselle et de la Sarre (CIPMS)

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Annex 3: Operationalisation of Independent and Control Variables

(1) Encompassingness of International Institutions

= Number of Policy Areas + Scope of Environmental Issues + Importance of Environmental Issues (Scale from 0 to 9)

Number of policy areas

3 Almost all areas ( ≥10) 2 Many areas (5 < 10) 1 One or few areas (< 5)

Scope of environmental issues

3 All environmental issues 2 Various environmental issues 1 One environmental issue only

Importance of environmental issues

3 Environmental policy plays a dominant role 2 Environmental policy is important, but not the only issue 1 Environmental policy is not very important

(2) Obligatory Potential

= Type of Law + Level of Monitoring (Scale from 0 to 10)

Type of law

3 Supranational law 2 International hard law 1 International soft law Additive scale, as all types of regulatory output exist complementary. Maximum score = 1+2+3 =

6

Level of monitoring

4 Monitoring by court 3 Specialized monitoring body 2 Reporting 1 Diplomacy

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(3) Communicative Potential

= Frequency of Interaction + Number of Organizational Bodies + Permanenceof Representation+ Size of Staff (Scale from 0 to 40)

Frequency of interaction

Number of annual meetings of national representatives (0,33- 150)

Number of organizational bodies

Number of organization bodies where national representatives meet (1-10)

Permanence of representation

Existence of permanent national representatives (0/1)

Size of staff

Number of permanent employees in environmental departments (0-574)

All indicators are rescaled to (0-10) and summed up.

(4) Cultural Similarity

= Common Border + Common Language + Common Religious Tradition (Scale from 0 to 3)

Common border Yes/No Common language Yes/No Common religious tradition Yes/No

(5) Political Pressure Through Green Parties

= Electoral Success + Membership in Parliament + Participation in Government (Scale from 0 to 3)

Electoral success Yes/No (≥1 % vote share national election, lower chamber) Membership in parliament Yes/No Participation in government Yes/No Data from closest national election to 1970,1980,1990,2000