Independent Regulatory Agencies and Accountability: Equality and Efficiency in the Regulation of Electricity and Telecommunication Markets

This article studies the effects of the public accountability of regulatory agencies on sector performance and economic inequalities. For many authors, accountability is a possible solution to solve the legitimacy problems of the regulatory state and to improve levels of citizen’s trust and satisfaction with otherwise rather technical regulatory decision-making. Furthermore, from the perspective of deliberative theory, public accountability may improve the quality of regulation and, thereby, sectoral performance by the attainment of diverse viewpoints and the rational deliberation of competing ideas and opinions. Specifically, higher levels of accountability may shift the focus on distributional outcomes as more diverse opinions from otherwise underrepresented groups such as low-income consumers are likely to be articulated. However, more accountability may also have adverse effects on regulatory quality and market outcomes. From the perspective of regulatory capture theory, accountability may result in an unintended politicisation of the issues at hand and lead to the disproportional influence of vested interests rather than better decision-making. This article tests these competing claims by studying the effects of variations in the accountability of electricity and telecommunications regulators on sector performance in a sample of about 100 countries. The method that will be employed for that purpose is OLS regression analysis. The exact sample size will depend on data availability.