Directorate for Public Governance
Infrastructure: ensuring good regulatory design
OECD Framework for the Governance of Infrastructure
4. ENSURING GOOD REGULATORY DESIGN
Good regulatory design and delivery are necessary to ensure sustainable and affordable infrastructure over the life of the asset.
WHY IS IT IMPORTANT?
- Uncertainty concerning the "rules of the game" will impact the willingness to invest in, maintain, upgrade and decommission infrastructure.
- Projects often involve many policy areas, several layers of legislation and regulation, and different levels of government.
- While regulators are seldom involved in market structure decisions, they are expected to accompany and supervise the implementation of significant policy changes.
- Regulators can bring to the table a consolidated economic or functional view of the sector or a given project, thus helping to bridge some of the co-ordination gaps that might exist between the different actors involved in the governance of infrastructure.
- The governance of regulators can also be taken as a reflection of the quality of the broader infrastructure investment regime. This effect can be particularly strong if the regulator is perceived as making decisions on an objective, impartial, and consistent basis, without conflict of interest, bias or improper influence.
KEY POLICY QUESTIONS:
- Is the overall regulatory framework for infrastructure sectors conducive to good governance of infrastructure?
- Are there multiple layers of regulatory requirements perceived as overly burdensome?
- Is there appropriate co-ordination between various regulatory bodies, as well as mechanisms for cooperation between regulators across borders?
- Are the functions, powers and capacities of regulators aligned with the role of regulators in the broader infrastructure permitting and approval process?
- What key data and information, including on costs of capital, asset depreciation and infrastructure consumer base, are available to inform tariff setting?
- Does the overall governance of regulators facilitate confidence and trust in the infrastructure investment regime?
IS INFRASTRUCTURE REGULATION FULFILLING ITS INTENDED ROLE?
Use of evidence-based tools for regulatory decisions:
- Impact assessment;
- Ex-post evaluation;
Governance of regulators:
- Scope of action of regulators.
GETTING INFRASTRUCTURE RIGHT
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