Delegation in the Regulatory State

Delegation in the Regulatory State

Independent Regulatory Agencies in Western Europe

Fabrizio Gilardi

During the past 25 years, independent regulatory agencies have become widespread institutions for regulatory governance. This book studies how they have diffused across Europe and compares their formal independence in 17 countries and seven sectors. Through a series of quantitative analyses, it finds that governments tend to be more prone to delegate powers to independent regulators when they need to increase the credibility of their regulatory commitments and when they attempt to tie the hands of their successors. The institutional context also matters: political institutions that make policy change more difficult are functional equivalents of delegation. In addition to these factors, emulation has driven the diffusion of independent regulators, which have become socially valued institutions that help policymakers legitimize their actions, and may even have become taken for granted as the appropriate way to organize regulatory policies.

Chapter 7: Conclusion

Fabrizio Gilardi

Subjects: economics and finance, public sector economics, politics and public policy, public policy, regulation and governance


INTRODUCTION The conclusion has three parts. We will first sum up the main findings discussed in this book. Second, we will argue that the quantitative analysis presented here can be usefully employed to go back to the cases with a strong analytical focus, because it helps identify relevant cases for case studies and qualitative comparisons. The case of the German energy regulator will be reviewed, and other suggestions put forward. Finally, we will discuss the broader issues raised by this book, including the link between formal and informal independence, the consequences of agencification for regulatory policy making, and the importance of interdependence and diffusion for the study of regulation. DELEGATION TO INDEPENDENT REGULATORY AGENCIES: WHAT HAVE WE LEARNT? What have we learned about delegation to IRAs? First, the credibility hypothesis receives strong confirmation. Credibility pressures increase both the probability that an independent regulator will be established and the extent of its formal independence. Supportive evidence is that delegation is more extensive in economic regulation in general, and in utilities in particular, than in social regulation, and that independent agencies are more likely to be established when utilities are privatized and/or liberalized. This pattern is consistent with our expectations linked to the credibility argument, which states that credibility problems are present when governments have to deal with investors, which is the case in economic regulation. However, the problem is most severe in utilities because of the high sunk costs present in these sectors, and because the recent market...

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