Stakeholder consultations as reputation-building: a comparison of ACER and the German Federal Network Agency

Abstract

Stakeholder engagement is thought to increase the legitimacy of independent regulatory agencies (IRAs). However, there is little research on how IRAs use the information that stakeholders contribute. We argue that the organizational reputation approach can explain different reactions to stakeholder engagement. IRAs usually rely on a reputation based on technical expertise. However, if IRAs have little capacities, they fall back on procedural or moral reputation. We analyze the consultations of the German Federal Network Agency (FNA) and the European Agency for the Cooperation of Energy Regulators (ACER) on planning electricity networks. Both have complex audience situations and an incentive to cultivate a technical reputation. However, their capacities differ. The FNA has capacities to cultivate a technical reputation, and selectively discusses technical contributions. ACER has less capacities. It selectively reacts to comments that criticize procedural aspects of network planning. Hence, we show how reputational concerns and capacities shape consultation procedures.