Keeping control of regulation? Domestic constraints on the creation of independent authorities in emerging and developing economies

Abstract

Regulatory independence has become an international norm over the past decades. Yet, governments in some emerging and developing economies have eschewed the model. We argue that this outcome is shaped by the domestic institutional context; in particular, authoritarianism and traditions of state control over the economy. Analyzing new data on the adoption and operation of independent competition authorities between 1990 and 2017, we find that authoritarianism and, to some extent, state-led economic traditions negatively affect formal adoption. By contrast, these institutional constraints do not have much impact on the start of the operations, which seems to be driven primarily by capacity and economic need. Our findings shed light on domestic institutional constraints on the spread of international norms and the limits of "regulatory transplants" in the Global South. 1 | INTRODUCTION Over the past decades, the importance of the state as regulator of the economy has increased considerably. Governments around the world have moved away from the model of the "positive

Policy coherence versus regulatory governance. Electricity reforms in Algeria and Morocco

“…The countries chosen for the comparison are Algeria and Morocco. Both countries share similar characteristics that are relevant for the functioning of the national political economy in developing countries: Islamic culture (Kuran, 2012), autocratic regimes (Apaydin, 2018; Koop & Kessler, 2021) and similar historical background under French domination. Both countries are neighbors, with similar geographic conditions, combining a large access to the Mediterranean cost in the North and to the Sahara in the South.…”

“…This was, for example, the case in India, where the Supreme Court intervened to bolster the authority and legitimacy of the recently created telecommunications regulator (Thiruvengadam & Joshi, 2012). Conversely, an example of possible contradiction could be the combination of an IRA in an authoritarian political system (Koop & Kessler, 2021). Indeed, most of the conflicts of interests at the level of the government that IRAs are meant to solve are related to electoral dynamics (Majone, 1996(Majone, , 2001Moe, 1995), so the added-value of independent regulation would be reduced in authoritarian contexts.…”

“…Regulatory governance in developing countries has become an important theme of research which has attracted interest among political scientists and economists alike. On the one hand, political scientists have tended to focus on the determinants of the diffusion of regulatory governance in the global South (Jordana et al, 2011; Jordana & Levi‐Faur, 2006; Koop & Kessler, 2021), and the factors influencing the various ways in which the regulatory governance was implanted in local institutional contexts (Dubash & Morgan, 2013; Jordana & Ramió, 2010; Martinez‐Gallardo & Murillo, 2011). Whereas political scientists focused on the “why” of regulatory governance in the global South, institutional economists have addressed the impact of regulatory governance, in particular regarding sector performance, and identified the many factors that limited or conditioned its effectiveness 1…”

The regulatory state in developing countries: Redistribution and regulatory failure in Brazil

“…A popular proposed solution to commitment issues has been to increase levels of independence of regulatory agencies, allowing them to distance themselves from political, economic, and judicial instability (Koop & Kessler, 2020;Pav on Mediano, 2020). Principal-agency inspired scholars would claim that delegation to independent agencies would be able to fix commitment problems of (previously) politicized decision making, reduce information asymmetries in technical areas, enhance efficiency of decisions through expert and targeted decisionmakers, and reduce the risks of political blaming for unpopular decisions (Calvert et al, 1989;Epstein & O'Halloran, 1999;Thatcher & Sweet, 2002).…”

Rethinking de facto autonomy? A multi‐policy area approach and the regulatory policy process

“…The principal‐agent framework has long dominated and still dominates the study of regulatory agency autonomy which focuses primarily on de jure autonomy from the “principal” (Coroado, 2020; Guardiancich & Guidi, 2016; Koop & Kessler, 2021; Yesilkagit, 2004). 1 However, de jure autonomy does not secure de facto autonomy (Bach, 2014; Badran, 2017; Carpenter, 2001; Christensen & Laægreid, 2007; Hanretty & Koop, 2013; Maggetti, 2007; Maggetti & Papadopoulos, 2018; Maggetti & Verhoest, 2014; Majone, 2001; Rommel & Verhoest, 2014; Verhoest et al, 2004).…”