Shall the law set them free? The formal and actual independence of regulatory agencies

Regulation by independent agencies, rather than ministries, is believed to result in better policy outcomes. Yet this belief requires one to accept a complex causal chain leading from formal independence to actual independence from politics, to policy decisions and, ultimately, to policy outcomes. In this study, we analyze the link between the formal and actual independence of regulatory agencies in Western Europe. New data on the appointment of chief executives of these agencies is used to create a proxy for the actual independence of agencies from politics. The analysis demonstrates that formal independence is an important determinant of actual independence, but the rule of law and the number of veto players matter as well

The adoption of digital practices by economic regulators: mapping digital pathways for consumer e-participation

This study bridges two emerging areas in the literature of economic regulation: the adoption of digital practices by national regulatory agencies (NRAs) and the empowerment of consumers for e-participation in regulatory processes through digitally enhanced consumer-facing platforms created by NRAs. With an aim to re-connect the regulatory state with citizens, we designed a novel framework, which comprehensively captures the digital capacity of NRAs and disentangles the multiple channels for consumer digital engagement with NRAs across the key regulatory procedures, including information provision, communication, education, and decision-making. To measure the extent of digitalisation of regulatory functions, we derived a composite index of digital adoption for 236 individual NRAs from a newly collected cross-sectional dataset, which spans across 42 geographically disperse EU and OECD countries with distinct regulatory and institutional pressures and public proactiveness in digitalisation. We analyse the cross country and cross-sectoral variation in the adoption of digital regulatory practices among the agencies with sole- and multi-sectoral competencies in five economic markets from utilities to financial services. Through modelling the impact of organisational-, industry-, and country level factors on the digital scores of NRAs, we address an overlooked question of whether the borderless nature of digital technologies allows to overcome the gap in adoption of consumer oriented regulatory practices. With these insights, this study offers implications for both improving the effectiveness of regulatory procedures through consumer-oriented digital transformation, as well as government initiatives for enhancing digital trust and e-participation in economic regulation among consumers

The growth of informal EU decision-making has empowered centrist parties

Legislative decision-making in the European Union is increasingly shifting toward informal secluded arenas, to allow for the early adoption of laws. Edoardo Bressanelli, Christel Koop and Christine Reh assess the implications of this trend for the behaviour of political parties in the European Parliament. They find that informalisation has strengthened the cohesion of the three centrist groups (EPP, S&D and ALDE), which have become more effective in delivering their members’ votes and in limiting defections. However, the authors argue that this increase in cohesion should not be taken as unconditionally good news for EU democracy

Measuring the formal independence of regulatory agencies

While the literature on delegation has discussed at length the benefits of creating independent regulatory agencies (IRAs), not much attention has been paid to the conceptualization and operationalization of agency independence. In this study, we argue that existing attempts to operationalize the formal political independence of IRAs suffer from a number of conceptual and methodological flaws. To address these, we define what we understand by independence, and in particular formal independence from politics. Using new data gathered from 175 IRAs world- wide, we model formal independence as a latent trait. We find that some items commonly used to measure independence – notably, the method used to appoint agency executives and the scope of the agency’s competences – are unrelated to formal independence. We close by showing that our revised measure partially changes conclusions about the determinants and consequences of formal independenc

Political independence, accountability, and the quality of regulatory decision-making

Recent decades have seen a considerable increase in delegation to independent regulatory agencies, which has been justified by reference to the superior performance of these bodies relative to government departments. Yet, the hypothesis that more independent regulators do better work has hardly been tested. We examine the link using a comprehensive measure of the quality of work carried out by competition authorities in 30 Organisation for Economic Co-Operation and Development (OECD) countries, and new data on the design of these organizations. We find that formal independence has a positive and significant effect on quality. Contrary to expectations, though, formal political accountability does not boost regulatory quality, and there is no evidence that it increases the effect of independence by reducing the risk of slacking. The quality of work is also enhanced by increased staffing, more extensive regulatory powers, and spillover effects of a more capable bureaucratic system

Measuring and explaining accountability : a comparative study of independent agencies

Defence date: 5 July 2011Examining Board: Prof. Peter Mair, European University Institute Prof. Mark Bovens Utrecht University (External supervisor) Prof. Adrienne Héritier European University Institute Prof. Mark Thatcher The London School of Economics and Political ScienceOperating at arm’s length of the political process, independent agencies are exempted from the accountability mechanisms inherent in the ministerial hierarchy. Alternative accountability instruments are, therefore, often introduced in the design of these organizations. This thesis focuses on these instruments, and addresses three related questions: (1) What instruments of accountability are applied to independent agencies? (2) What variation in degrees of accountability can we observe? (3) Why are some independent agencies subject to more accountability instruments than others? Accountability arrangements are set up both by politicians and by independent agencies themselves. An analytical and empirical distinction is, therefore, made between mandatory accountability – imposed on organizations by politicians – and voluntary accountability – introduced by the organizations themselves. Furthermore, as the hypotheses on variation in accountability suggest differences across policy areas and political systems, the empirical study is divided into two parts. The first part compares a wide range of independent agencies in different policy areas within one country – the Netherlands; while the second part compares independent agencies operating in a single policy area, competition policy, across a wide range of different political systems. The study finds that independent agencies are subject to a variety of accountability instruments, and to varying degrees of accountability. Mandatory and voluntary accountability go hand in hand: organizations with high scores on the one also tend to have high scores on the other. Issue salience is a strong predictor of both types: agencies dealing with more salient issues are subject to more extensive accountability arrangements. Depoliticization plays a role in mandatory accountability, and when more veto players are involved in the policy-making process they tend to introduce fewer provisions for accountability. Other factors which matter for mandatory accountability are the salience of the issue of accountability itself, the level of trust in the civil service, the number of stakeholders of the agency, and the agency’s legal status and powers. Factors which matter for voluntary accountability are the democratic experience of, and stakeholders in, the polity, as well as the age, legal status, resources, and competences of the organization

Explaining the accountability of independent agencies : the Importance of political salience

Independent agencies are exempted from the accountability mechanisms inherent in the ministerial hierarchy. To compensate for this, politicians incorporate all kinds of information and reporting requirements into the statutes of the organizations. However, the degree to which this occurs varies considerably, which raises the question: Why are some agencies are made more accountable than others? This study examines the impact of political salience on degrees of accountability, controlling for other potential explanations. Using original data on 103 independent agencies in the Netherlands, the analysis demonstrates that salience has a twofold effect. First, agencies dealing with more salient issues are made more politically accountable. Second, agencies whose statutes are written when the issue of accountability is more salient are also subject to higher degrees of accountability. Other explanatory factors are the number of veto players and the legal basis of the organization