Policy learning in Europe: the open method of co-ordination and laboratory federalism

ABSTRACT This paper analyses the potential of the open method of co-ordination (OMC) and of laboratory federalism for policy innovation and learning in a multi-level system of jurisdictions. Our analysis shows that both can be seen as institutions that establish processes of generating and spreading new knowledge about appropriate public policies. However, the respective learning mechanisms are very different: in laboratory federalism learning takes place through a purely non-centralized process of experimentation with different new policies. In comparison, the OMC relies on a benchmarking process carried out on a higher-level jurisdiction from which, in a rather centralized way, policy recommendations are derived. In both cases, serious learning problems resulting from limited transferability of experiences gained with policies and from lacking or distorting incentives arise. We find that to fully use their potential the OMC should become an integral part of laboratory federalism, thus supporting the smooth working of yardstick, interjurisdictional and regulatory competition.