According to a received wisdom – at least in our Western world – “hard” is better than “soft”: think of expressions such as hard sciences, hard facts, hard truth, hard skills, or – as in project management literature – hard projects as opposed to soft ones. “Soft” is a second-best option, something we would reluctantly accept when hardness is for some reason impossible. Recent debates on hardening of “soft governance” in EU energy and climate policy is yet another illustration of the assumption. 

But does the assumption apply to governance? Is being harder necessarily more effective in steering society towards the desired directions by shaping behaviour? The obvious answer is “no” – the limitations of hierarchical steering became well known at the latest in the 1960s, in the increasingly plural and complex Western societies. 

A more nuanced answer would be “yes and no – it all depends”. 

To explore what “it depends” means for policy appraisal, I examined OECD international peer reviews – sometimes called country reviews – as one of the oldest soft governance mechanisms, and the trademark of the organisation. The analysis, published in the recent Journal of Environmental Policy & Planning special issue on hardening of EU's climate and energy policy, shows that rather than being hard or soft, an influential review must produce a cocktail tailored to the target group and situation and hand. A peer review needs to strike a chord – it must resonate with the target audience. To do so, it needs to sufficiently align with the targeted policymakers’ own ideas and ways of thought, while retaining the ability to surprise and provoke new thinking.

The OECD experience can provide useful lessons for EU attempts at hardening its energy and climate governance, explored in a recent special issue of Journal of Environment and Planning. I analysed three OECD-family reviews: the Economic Surveys, as the “flagship” of OECD since 1961; the Environmental Performance Reviews, and the International Energy Agency (IEA) Energy Policy Reviews. 

Peer pressure logic

The very philosophy of peer reviews – the peer pressure logic – relies on a dynamic between “hard” and “soft”. It combines mutual surveillance of policy performance with exchange and dialogue. Peer reviews seek to simultaneously enhance states’ compliance with established standards and principles, and improve their policymaking via the adoption of best practices. 

A typical OECD peer review consists of six stages: setting up of a review team and preparing a desk study; the review mission(s); drafting of the review report; peer review meeting in Paris to discuss the preliminary findings amongst experts from all member countries; publication of the review report; and follow-up the implementation of the recommendations. These phases entail different mixes of soft and hard elements, depending on the review in question. 

A country’s performance is examined in light of its own policy objectives, the principles and goals shared by the member countries, selected OECD/IEA indicators, and the country’s success in implementing the policy recommendations from the previous review.

All this should take place in a non-adversarial setting, characterised by mutual trust, shared confidence in the process, and mutual accountability (OECD 2003, 9).

What is hardening?

But what exactly is understood by “hardening”? In their introduction to the special issue, Jonas Schoenefeld and Michèle Knodt detail its various dimensions. Obligation essentially relates to the hardness of wording in agreements or recommendations. Justification describes the degree to which a country has to explain its decisions on whether or not to heed the recommendations. Precision enhances the hardness of recommendations. Peer reviews can provide varying degrees of opportunities for blaming and shaming states for poor behaviour. Finally, bundling can foster hardness by streamlining different policy elements within a single policy field, as can coupling a softer governance mechanism with another policy field, where for instance financial sanctions are possible.

Hard Economic Surveys vs. soft Environmental Performance Reviews?

The Economic Surveys are believed to be the “hardest” and hence the most influential among the OECD reviews, yet the picture looks more complex in view of the multiple dimensions of hardening. The role of the reviewed-country government is a key determinant of the hardness of an OECD review process. Interestingly, on this very point, the influential Economic Surveys appear as “soft”, because the reviewed country government has significant influence on the framing of the review and prioritising the conclusions and recommendations. The Environmental Performance Reviews leave less room for the government to influence the contents of the review. On the other hand, these reviews examine performance in light of the reviewed country’s own policy objectives, rather than external criteria, such as the IEA Shared Goals or criteria derived from the principles of mainstream economics.

Therefore, it is difficult, if not impossible, to given an unambiguous answer to the question of which of the peer reviews is the hardest.

Limits of hardening

The OECD peer reviews illustrate three key limitations of hardening. First, hardening can erode the very foundation of soft governance, namely mutual trust and ownership. Second, hardening is multidimensional, hence trade-offs exist between the forms of hardening. Third, hardening has a direction and can therefore have desirable or deleterious impacts on society, depending on the underlying purposes, interests and policy objectives.

1. Harder but less legitimate?

Hardening can undermine the very foundation of soft governance, notably the mutual trust and ownership that the effectiveness of soft governance relies upon. Strengthening the “blaming and shaming”, for example, might alienate the reviewed country government from the process, and undermine the mutual trust that underpins the process. It could rigidify the relatively free-flowing and frank debate that is meant to characterises peer review processes, replacing debate by confrontational negotiation governed by strict negotiation mandates from the capitals. 

2. Trade-offs between dimensions of hardening

Hardness is made up of multiple dimensions that can work in tandem or enter in tension with each other. The Economic Surveys provide an example. The Economic Surveys have several hard elements. Conducted at short intervals (18-24 months), they allow rigorous follow-up of the implementation of the recommendations. The Economic Surveys also have strong backing in the set of shared beliefs held by the economist community. The dominant role of the secretariat in the process of drafting the report can foster precision and facilitate blaming & shaming. 

However, both blaming & shaming and bundling & coupling (policy integration within and across sectors) can suffer, if the reviews are seen as products of technocrats distant from day-to-day complexities of real-world policymaking.[1]Furthermore, the independence of the secretariat in drafting the review is counterbalanced and ‘softened’ by the close engagement of the reviewed country’s top policymakers and labour market organisations especially in drafting the conclusions and recommendations. What is more, close involvement of the reviewed country can actually mean hardening, when the country officials seek support for their views by asking for sharp recommendations on specific topics (e.g. Lehtonen 2005, 208; Porter & Webb 2008).

3. Hardening has a direction

Finally, hardening is not policy neutral or free of political interests. The OECD peer reviews typically serve advocacy by specific epistemic communities, that is, groups of likeminded specialists such as civil servants, independent experts and NGOs, within the various member countries and in the OECD secretariat. If indeed hardening strengthens the impact of reviews, one still needs to answer questions such as impact through which pathway, in the service of which purposes, and over which timeframe? 

Does a review empower the environmentalist community within the economics-dominated OECD policy world? Or would it instead strengthen the grip of economics in environmental and energy policy? If the latter is the case, which kind of economics is being strengthened? Which of the various epistemic communities in the energy and climate sector, each advocating their own energy and climate policies, will benefit from a given type of hardening? How are the power relations between renewables, fossil and nuclear advocates affected? 

In general, hardening tends to privilege those impact pathways that rely on accountability, top-down diffusion of policy ideas, and greater publicity. In doing so, hardening can undermine the alternative pathways of bottom-up learning that take place through the interaction between experts and civil servants within arenas relatively free from external pressures. 

What can the EU learn from the OECD experience?

The EU is a highly political organisation – not an OECD-style global think tank or an ‘idea sweatshop’. One might imagine that as an organisation holding significant coercive power, the EU would be relatively free to ‘harden’ its policies, unlike the OECD, whose influence essentially depends on the support of its member countries. However, the EU faces challenges similar to those of the OECD: expanding membership means less cultural homogeneity, reduced levels of trust and value sharing (Pagani & Wellen 2008, 273), and increasing difficulties at reaching consensus (Ringel & Knodt 2018). Moreover, hampered by the widespread aversion towards ‘Brussels bureaucrats’, the EU does not enjoy a similar a priori goodwill the OECD still does, especially within national administrations. 

Moreover, the energy sector constitutes a controversial and normatively charged field, in which the EU has little direct coercive, regulatory power, member countries jealously safeguard their sovereignty, disagree on values, and are reluctant to heed advice (Ringel & Knodt, 2018). Group-wise benchmarking of countries according to their specific needs (cf. Groenendijk 2011) might help keeping the increasingly heterogenous EU country membership satisfied – a precondition for effective soft governance. When trying to harden its energy and climate governance, the EU should tread carefully, and learn from the OECD experience of identity-building, socialisation, and joint norm-creation that soft governance relies upon. Hardening is multidimensional, and its impacts sometimes ambiguous and seldom politically neutral.

Source: Lehtonen, M. 2020. Harder governance built on soft foundations: experience from OECD peer reviews. Journal of Environmental Policy and Planning 22(6): 814-829. Special Issue "Harder Soft-Governance" in European Climate and Energy Policy: Following a New Trend?

References

Groenendijk, N. 2011. EU and OECD benchmarking and peer review compared. In F. Laursen (Ed.), The EU and federalism: Polities and policies compared (pp. 181–202). Routledge.

Knodt, M., & Schoenefeld, J.J. 2020. Harder soft governance in European climate and energy policy: exploring a new trend in public policy. Journal of Environmental Policy & Planning 22(6): 761-773.

Lehtonen, M. 2005. Environmental policy evaluation in the service of sustainable development: Influence of the OECD environmental performance reviews from the perspective of institutional economics. U.F.R. Des Sciences Sociales et des Humanités. Université de Versailles Saint-Quentin-en-Yvelines. 335 p.

OECD. 2003. Peer review: An OECD tool for co-operation and change. Paris: Organisation for Economic Co-operation and Development.

Pagani, F., & Wellen, U. 2008. The OECD peer review mechanism: Concept and function. In K. Tanaka (Ed.), Shaping policy reform and peer review in Southeast Asia: Integrating economies amid diversity (pp. 261–277). Paris: OECD.

Porter, T., & Webb, M. 2008. Role of the OECD in the orchestration of global knowledge networks. In R. Mahon & M. Stephen (Eds.), The OECD and transnational governance (pp. 43–59). UBC Press.

Ringel, M., & Knodt, M. (2018). The governance of the European energy union: Efficiency, effectiveness and acceptance of the winter package 2016. Energy Policy, 112, 209-220.