Hence, the aim of this article is to explain how the German parliament uses its new review procedure for rail projects.

As our focus lies on the relation of parliament to other actors, to which it has delegated tasks, we choose the principal-agent theory as a plausible starting point and conceptualize parliament as the ultimate principal of railway planning. In parliamentary democracies, the relations between actors can be conceptualized as delegation chains [8]. In delegation relations, principals delegate authority to an agent to decide in their name. In a stylized way, the delegation chain in parliamentary democracies is as follows: The electorate as the ultimate principal delegates authority to the parliament, which in turn delegates executive competencies to the government. Within the government, the ministries are again hierarchically structured into relations of delegation and accountability.

There is rich literature available on the role of parliament as a principal in general, but there is no literature available on the role of parliament as a principal in the traditionally executive-dominated field of infrastructure planning. However, we can use general principal-agent reasoning to derive hypotheses about the role of the German parliament in the review procedure for rail projects.

The starting point of our argument is the literature that seeks reason regarding the principal’s behavior in the overall logic of the delegation relation. Delegation relations can exist between a principal and an agent or a trustee [18]. In relation to an agent, the principal delegates could reap efficiency gains, for example if an agency has more information and specialized personnel and can thus fulfil a task better than the principal. The purpose of the delegation relation is that the agent fulfils the principal´s preferences closely. In relation to a trustee, the idea is one of credible commitment. The principal wants to credibly commit to a line of action, but knows that it has an incentive to deviate from that aim. Thus, the purpose of the independent trustee is to follow an abstract mandate—for example, monetary stability—and not be under close control of the principal.

The central issue in the relation between principal and agent is how the principal can ensure that the agent is responsive to the principal´s preferences. Institutional solutions include first ex ante screening of the agents for their preferences, second contract design so that the incentives of the agent are to follow the principal´s preferences, third the use of competing agents (“institutional checks”), and fourth the institutionalization of reporting obligations for the agent and supervision opportunities for the principal.

In the relation between a principal and a trustee, all these measures would be counterproductive, as the purpose of a trustee is to be insulated against short-term interference by the principal [18].

Principal-agent reasoning helps us to formulate expectations about the behavior of the German parliament. First, the principal profits from relying on competing agents [6]. In our case, parliament can compare the reports by DB Netz AG and the Federal Railway Authority. Second, deck-stacking can be used to change the logics of decision making [5]. With deck-stacking, the principal designs the decision-making process in a way that systematically includes stakeholders in the process: “alterations in procedures will change the expected policy outcomes of administrative agencies by affecting the relative influence of people who are affected by the policy.“ [5] In our example, early public participation functions as deck-stacking. Stakeholders comment on the proposal by the DB Netz AG, and the German parliament can decide on this basis whether it wants to deviate from the initial proposal. Third, deck-stacking induces stakeholders to demonstrate how important an issue is for them by sending costly signals [5]. The principal needs to assess whether the information delivered is suitable to inform a good decision. We know from the literature that those affected by infrastructure projects tend to use participation frameworks for voicing their discontent rather than contributing useful information [19, 20]. In our case, costly information would be public demands that accurately meet the criteria defined by parliament when setting up the review procedure.

In light of this discussion, three hypotheses can be formulated. The dependent variable of interest in either case is whether the German parliament accepts the preferred solution from the DB Netz AG without any changes or whether, and to what extent, parliament accepts demands for gold plating. Thus, the dependent variable is on the level of the single demands voiced within the overarching rail projects.

The first hypothesis builds on the logic of competing agents: The Federal Railway Agency is tasked with securing cost efficiency of railway projects, and the Ministry of Transport forwards the Agency’s position to parliament. The demands from early public participation are always more expensive than the initial proposal by the DB Netz AG. Therefore, the Federal Railway Authority and the Ministry consistently recommend adopting the initial proposal by the DB and not engaging in any gold plating. Adopting an economic perspective, the German parliament would be more likely to accept additional demands, if these incur only marginal additional costs. High costs for gold plating railway projects restrict budgetary leeway for other purposes and must be justified.

Hypothesis 1 (cost efficiency)

The higher the costs for gold-plating demands, the less likely it is that the German parliament accept these demands.

The second hypothesis builds on the deck-stacking argument, which stipulates that the German parliament uses information from early public participation to decide on gold-plating demands. According to this logic, those affected by the respective project get privileged access to the decision-making process and can signal to the principal what their preferences are. The broader the participation, the clearer the signal for potential political and implementational problems: “The […] provisions assure that the agency learns who the relevant political interests are to the decision and something about the political costs and benefits associated with various actions. That participation is not universal (and may even be stacked) does not entail political costs. Diffuse groups who do not participate, even when their interests are at stake, are much less likely to become an electoral force in comparison with those that do participate.“[5]

Hypothesis 2

The more encompassing the participation in the early consultation process for a railway project, the more likely the German parliament will accept gold-plating demands from this consultation process.

Hypothesis 3 does not regard the quantity of participation but the quality of the demands raised. As argued above, the principal has reason to consider signals if they are costly, thus demonstrating that the signalling party is well-informed. In our case, costly signals are such demands that correspond to the criteria for potentially acceptable demands as formulated in the parliamentary decision to set up the review procedure for railway planning in 2016. Namely, this concerns projects being part of the Trans-European Network of Transport (TEN-T) as well as demands addressing noise protection.

Hypothesis 3

The better the gold-plating demands correspond to the criteria initially formulated by the German parliament for such demands, the more likely parliament will accept these demands.

The hypotheses correspond to the different logics discussed in the context of principal-agent relationships. According to hypothesis 1, parliament follows the logic of efficiency as propagated by its trustee, the Federal Railway Authority. According to hypotheses 2 and 3, the parliament follows competing signals from early public participation either in terms of deck-stacking or in terms of the accuracy of fit of the information provided.

All hypotheses stress an underlying pattern of parliamentary reactions to gold-plating demands. Still, it is possible that such a pattern is not discerned empirically. It is conceivable that e. g. regional background of MPs, electoral cycles, or package deals influence the incorporation of gold-plating demands. All these possibilities are difficult to study, but could render an explanation based on the principal-agent framework inadequate to grasp parliamentary behavior.

Null hypothesis

The probability for parliamentary acceptance of gold-plating demands is neither related to costs nor to the scope of early public participation nor to the accuracy of fit of the arguments presented in the early public participation.

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