TITLE:
A New Governance Model for Independent Regulatory Agencies
AUTHORS:
Rui Nunes, Sofia B. Nunes, Guilhermina Rego
KEYWORDS:
Accountability, Independent Regulatory Agencies, Regulatory State of the South, Sunshine Regulation
JOURNAL NAME:
Theoretical Economics Letters,
Vol.5 No.1,
January
19,
2015
ABSTRACT: In
a regulatory state the purpose of intervention by any Independent Regulatory
Agency (IRA) is not only regulation in the strict sense but also the
supervision of the activity of institutions providing a specific service,
particularly the utilities. However, given the evolution of most market
economies, namely in transition countries, it is necessary to design new
governance arrangements that enable an effective, transparent and truly
independent intervention of IRAs. The objectives of this study are a) to analyse of the institutional-design chosen for some
independent regulatory agencies and its regulatory framework, namely in northern economies, and
b) to suggest the need to strengthen governance arrangements to effectively
guarantee regulatory independence, transparency and accountability, therefore promoting
a true sunshine regulation in southern economies. The authors conclude
that strengthening accountability arrangements is the most important mechanism
to avoid regulators capture from the government and regulated organisations. It
is also concluded that the way regulators have chosen can also influence the
way IRA conducts its activity. Therefore, it is suggested that board
accountability can be enhanced by the generalization of the principle of the
public contest of regulators.