The Governance of Markets, Sustainability and Supply. Toward a European Energy Policy

European energy policy dates back to the founding days of integration, yet the emergence of supranational governance is a recent development. The article examines the extent to which European policymakers have succeeded in building up governance capacity, and what the facilitating and impeding factors were that have shaped the governance mix. The conceptual framework differentiates between orders of governance in the multilevel context, and between policy modes involving hierarchical and non-hierarchical settings and varying actor constellations. The article finds that governance capacity has emerged where second order governance (institutional and procedural rules) is concerned, while first order governance (the concrete policy process) remains the remit of national and private actors. This becomes even more obvious once the interaction between policy modes is taken into account: governance networks enhance governance capacity in the area of competition policy and agency governance; self-regulation by industry constitutes a fall-back option in case of insufficient governance capacity on cross-border issues; soft governance helps to bridge multiple policy areas and levels of governance. The article concludes that second order governance may prove effective where it combines with hierarchy but that it may fail to overcome both trade-offs between contradicting goals and resistance at lower levels