"What makes an independent regulator is not simply institutional design. Moreover, independence does not imply that regulators are anonymous, silent, or above and beyond the policy arena. Regulators interact with ministries, who are ultimately responsible for developing the policies for the regulated sector; with parliaments, who approve those policies and often evaluate their implementation; with the regulated industry, which needs to comply with the decisions of the regulator; and with citizens, who are the ultimate beneficiaries of the actions of governments and regulators. These interactions are inevitable and desirable. The balance between the appropriate and undue influence that can be exercised through these interactions is at the core of the discussion on the independence of regulators. This report identifies the critical points where undue influence can be exercised by looking at the rationale – the why – and the practical implications – the how – of independence. It builds on a review of the academic literature to pinpoint why independence matters and what independence is expected to bring. It relies on responses to a survey conducted among 48 regulators of 26 OECD and partner countries across all economic sectors to identify how independence is translated into practice." (Foreword, p.3)
Contents
1 The why and the how of being an independent regulator, 15
2 Why does independence matter? The view from the literature, 33
3 How does independence work in practice? Key trends and evidence, 51