Accountability in Infrastructure Regulation
In some countries regulators wield significant power over vital
elements of a country’s economy. In other countries, regulators perform a more
modest role or are only emerging as a significant economic actor. The effects of
regulators’ decisions are typically long lasting and resonate beyond the
parties directly effected by the decision – with significant impacts being felt
by: the regulated parties; their shareholders and financiers; their
competitors, customers and suppliers; and, in many cases, by final consumers.
Regulators’ decisions often also have significant political implications.
Effective accountability mechanisms are essential to the development of
credible and effective regulatory organisations and satisfactory development of
a country’s infrastructure sector. There are several key factors that seem to
play a part in ensuring appropriate accountability exists:
Regulatory instruments - A starting point for achieving
regulatory accountability lies in the instrument through which regulation is
imposed, be it a legislative act, an order or decree, an operating licence or
agreement, or some other instrument. Clear objectives are essential and where
trade-offs exist among regulatory objectives, clarity as to how such trade-offs
are to be made is highly desirable.
Regulatory institutions - The nature of the regulatory
institution is also important. Here, issues such as the degree of autonomy and
independence from governmental influence are important.
Regulatory decision processes - The regulatory decision
process is critical. Catchword principles such as predictability and consistency
are central. So too are the opportunities for interested parties to be heard
and offer evidence, and the transparency of the process through which such
submissions are considered and decisions arrived at. But, an important issue is
how the views of poorly resourced interested parties are balanced.
Appeals procedures - Appeals against decisions also play an important
role in maintaining accountability.
Discussion Questions
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