Canada-United States electricity relations: test-bed for North American policy-making?

Author:Gattinger, Monica

    It is often said of North America that we are not the European Union, that we do not share joint political institutions, and that we do not make policy supranationally. The conventional wisdom holds that cross-border policy relations take place between discrete sovereign governments and that they focus mainly on coordinating domestic policies that generate undesirable externalities across borders or that could benefit from greater alignment to "level the playing field" for private sector interests. What is less explored is the possibility that - similar to cross-border economic relations, where the saying, "we don't trade things with one another so much as we 'make things' together" (3) is in good currency - when it comes to cross-border policy relations, we "make policy" together in the absence of formal political integration. That we might do so is hardly surprising given the extent of economic integration and interdependence in North America and similar policy approaches, challenges and opportunities across a range of sectors. With limited exceptions, however - and these, largely on a sub-national regional basis - we have little explored this terrain theoretically or empirically.

    This essay takes aim at this issue, examining the emergence of "North American policy-making", a shift in the nature of cross-border policy relations from conventional intergovernmental exchanges to quasi-supranational approaches. This development represents a change in kind from traditional conceptualizations of cross-border policy relations, which classify them along a continuum from conflict through to independence and harmonization (Gattinger and Hale, 2010), to an approach that begins with North America as the relevant geographical starting point and unit of analysis in policy development. (4)

    The aim here is not to suggest that all policy processes are heading in this direction. Clearly, domestic processes and conventional cross-border relations will continue to dominate policy-making on the continent. Rather, I aim to zero in on a new "species" of policy-making in North America, one that is unlikely to supplant its domestic counterparts, but may well gain greater traction, particularly where high levels of economic integration, cross-border interdependence and policy convergence prevail.

    This analysis, while focusing on the electricity sector, is likely to interest the broader community of policy-makers, practitioners, scholars and students of North American integration. It offers a somewhat different reading of predominant understandings of continental integration by challenging the claim that integration in North America is a process of regionalization - private sector-led economic integration, not regionalism - state-led political integration (Capling and Nossal, 2009). It also calls into question the thesis that a common identity, common vision, sense of community or "wetness" in North America is a prerequisite for deeper regional integration (Golob, 2002). The concept of North American policymaking is more in keeping with analyses proposing that political integration can occur in the absence of supranational institutions (McDougall, 2006). Of greatest significance, political integration may emerge as a "bottom-up" incremental process that need not be driven by formal federal-level initiatives. Instead, it may be born of pragmatism, shared interests and necessity in discrete policy fields, sub-fields and issue areas. Nonetheless, as will be discussed in the concluding section of this essay, attention must be paid to the politics of these processes and their democratic credentials. Expectations for openness, transparency, equity, engagement, and the like, must be attended to if North American policy-making is to become more widespread and acceptable to the general public.

    The case at hand is the electricity sector, which has witnessed a considerable degree of policy convergence over the last two decades and offers a number of fascinating but little-known instances of North American policy-making. To set the theoretical stage for the analysis, the following section distinguishes between policy convergence, cross-border policy relations and North American policy-making. The next explores policy convergence in the electricity sector over the last twenty years, paying particular attention to the drivers underpinning these developments, as they may hold the key to understanding why and where North American policy-making might emerge. Following this, the essay turns to cross-border policy relations and North American policy-making in the electricity sector in recent times, teasing out the factors that appear to be driving emergence of the latter. The primary focus of the analysis is on Canada-United States electricity relations given that they tend to be more developed than their US-Mexico counterparts, but Mexico and the southern electricity border will be considered where relevant. The concluding section discusses the implications of the foregoing analysis, notably the importance of exploring the politics and democratic characteristics of these processes. It argues that these considerations need to be attended to in a meaningful way if North American policy-making is to hold promise for the future.


    Policy convergence, cross-border policy relations and North American policy-making are three separate but interrelated processes. The first refers to "the tendency of policies to grow more alike, in the form of increasing similarity in structures, processes and performances" (Drezner, 2001: 53). Policies can become more alike along a number of different dimensions: goals (the objectives of policy), content (formal expressions of policy), instruments (the tools used to pursue policy objectives), outcomes (implementation results) and styles (characteristic policy development processes) (Bennett, 1996). Policy convergence is a vibrant sub-field of comparative public policy, particularly because of increasing regional and global economic integration, technological change facilitating transnational communication, and the proliferation of policy problems transcending jurisdictional boundaries (climate change, health pandemics, species at risk, etc.). In the 1960s and 1970s, the "convergence thesis" - whereby policies would grow increasingly alike as a result of such forces - animated scholarship, but this has given way to more nuanced analyses in light of mounting empirical evidence that domestic factors (e.g., institutions, politics, policy legacies, culture, etc.) attenuate or mediate the forces of convergence (Ibid.).

    The literature identifies five main factors that drive policy convergence. (5) The first, economic integration and interdependence, generates pressures on jurisdictions to adopt similar policies to maintain their economic competitiveness through a process of regulatory competition (Holzinger et al, 2008; Holzinger and Knill, 2005; Knill, 2005). In North America, economic integration and interdependence can also drive convergence when business seeks a "level playing field" for operations, often expressed as the desire for governments to remove the "tyranny of small differences" in their respective regulatory frameworks (Doern and Johnson, 2006). Second, common domestic pressures, such as technological change, environmental threats, growing ethno cultural diversity, population aging and the like, can also propel convergence. But in this case, countries are not consciously adopting their counterparts' policies so much as they are independently developing similar policy responses to comparable issues (Banting et al, 1997; Knill, 2005).

    Transnational communication, the third driver, encompasses a number of mechanisms based on information exchange and communication (Knill, 2005). With emulation, countries look to other jurisdictions for policy insight, "pinching ideas" from foreign counterparts in domestic policy development (Schneider and Ingram, 1997, as cited in Deleon and Resnick-Terry, 1998: 14; see also Bennett, 1991; and Howlett, 2000). (6) This is distinct from policy diffusion, which refers to "successive adoptions of a policy innovation" by multiple governments (Bennett, 1991: 200). While it is similar to emulation, diffusion does not require conscious lesson-drawing on the part of states (Ibid.) nor does it involve formal or contractual commitments (Busch and Jorgens, 2005), as is the case with harmonization (see below). International organizations are often the transmission belts for policy diffusion, communicating innovative policy approaches throughout the international system. Elite networking, meanwhile, involves ongoing transnational communication processes between and among state and non-state actors (often functional policy specialists, experts and industry leaders) leading to the development of shared ideas and policy prescriptions (Bennett, 1991).

    Harmonization, the fourth driver, involves a similar process of explicit adoption of common policy frameworks. But in contrast to transnational communication, governments come together with the intent of mutually agreeing upon harmonized policy approaches (Bennett, 1991). Harmonization generates legal requirements for states to adopt analogous policies and arises due to interdependencies or externalities (economic, social, environmental, etc.) which propel states to cooperate (Holzinger and Knill, 2005; see also Bennett, 1991; and Knill, 2005). (7)

    The foregoing drivers contrast with imposition, (8) through which a state seeks to impose its policy approaches on foreign counterparts as a means of pursuing domestic objectives (e.g., national security, economic protectionism, trade liberalization, etc.). As Busch and Jorgens describe, "imposition occurs when external actors intentionally force nations to adopt policy innovations which they would not have...

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