Preference Formation and Expert Deliberation in the European Integration Process of Public Sector Accounting

Abstract

For more than a decade, the European Commission and a dedicated expert group have been working on the development of European Public Sector Accounting Standards (EPSAS). The policy initiative was initiated by the European Commission in 2013, in the aftermath of the sovereign debt crisis, to address deficiencies in fiscal surveillance of member states. With the initiative the European Commission pursues the harmonization of member states’ public sector accounting (PSA) practices through a common suite of accrual-based accounting standards. However, despite the presence of a strong functional need as well as ongoing deliberations in the expert group, the project has not yet been completed and is stuck in the pre-proposal stage of the EU’s policy process. In view of this policy-specific puzzle, this dissertation analyses why the considerable efforts made towards European integration of PSA through the development of EPSAS have yielded only limited progress and is still in the pre-proposal stage. Although the pre-proposal phase of the EU’s policy process and the initial formulation of policies can have a considerable bearing on eventual integration outcomes, it has received little attention. This thesis considers the pre-proposal phase and the process leading to a draft policy as interim outcome as a process in its own right. However, as this thesis argues, this process is equally shaped by national preferences and international negotiations. Therefore, this cumulative dissertation analyses these aspects of the EPSAS case through three different studies. The first study examines, using a vignette experiment, whether and how the European Commission’s goal framing influences support for the EPSAS initiative, and, using conjoint analysis, the impact of individual-level norms and values on EPSAS policy outcome preferences. The conjoint analysis indicates that preferences of member states’ bureaucrats for the design of EPSAS are to certain extent influenced mainly by their attachment to different layers of the political order (collective identities) and public service motivation. The vignette experiment reveals that framing the EPSAS initiative in terms of the functional need to strengthen fiscal surveillance is more effective in stimulating support than framing it on normative grounds as an initiative contributing to transparency and accountability. These findings contribute more generally to our understanding of what drives bureaucratic elites and national public administrations’ experts’ preferences and support for supranational policy solutions. The second study analyses which institutional context factors of member states’ public administrations and authorities influence their reception of the EU’s reform plans by analysing their responses the Commission’s public consultation on the suitability of the International Public Sector Accounting Standards. By means of discourse network analysis and exponential random graph modeling, the study maps public administrations and authorities’ relative positions on the initiative. It finds that these are shaped by countries’ administrative traditions as well as their participation in the Eurozone. The third study zooms into the deliberations of the EPSAS expert group (EPSAS-EG) and traces the development of the EPSAS initiative over time. Building on literature on policy design and by means of process-tracing, the study finds that pre-existing policy instruments such as the EU’s statistical reporting framework and design choices on higher-order policy elements cause challenges in achieving coherence, consistency, and congruence downstream when it comes to the calibration and definition of street-level requirements. Member state delegates to the EPSAS-EG recognize these design integrity and superiority challenges and withhold their backing of tabled solutions, leading to a constraining expert dissensus. In sum, these three studies help understand the root causes of heterogenous preferences and different positions on the EPSAS initiative and why the EPSAS-EG deliberations did not produce a substantive outcome. Moreover, they complement European integration theory by shedding light on preference formation and expert deliberation in the pre-proposal phase. Therefore, the findings of the three empirical studies provide relevant lessons for the preparation of policies in European Commission expert groups and for scholars engaged in the study of this phenomenon.