With the emergence of the regulatory state and the proliferation of independent regulatory agencies worldwide, Iran has also exhibited signs of transformation within its public sector institutions toward a distinct form of the regulatory state. The establishment of the National Competition Council in the late 2000s stands as one of the most notable milestones in this evolutionary trajectory—an institution that epitomizes a independent regulatory agency in Iran. Broadly speaking, independence is regarded as one of the most fundamental institutional attributes of regulatory agencies, conferring significant advantages. However, given the non-elected and non-democratic nature of independent regulatory agencies, independence must inherently be coupled with accountability. In this study, we seek to elucidate the interplay between independence and accountability within regulatory institutions by applying principal-agent theory. Subsequently, through a focus on the National Competition Council and employing methods such as document analysis, legal review, and semi-structured interviews, we evaluate the institution’s de facto standing in its engagement with the government from the dual perspectives of independence and accountability. The findings reveal that despite the government’s extensive delegation of authority to the National Competition Council and its ostensibly robust legal framework, the institution suffers from substantive operational deficiencies and has failed to actualize its de jure independence in practice.
