Regulatory policy

Third meeting of the Network of Economic Regulators

 

5 November 2014

 

Key highlights from the meeting included:

 

  • Independence, Accountability and Scope of Action of Economic Regulators—What requirements guarantee the independence of economic regulators? What accountability mechanisms are in place? What is the scope of action of regulators in key economic sectors? The paper The Global Picture of Economic Regulators – Independence, Accountability and Scope of Action offered an opportunity to discuss some of these questions, relying on a unique set of data collected with the support of the NER. For the first time, the OECD Product Market Regulation (PMR) Survey includes indicators on the legal framework supporting independence, scope of action and accountability of regulators responsible for electricity, gas, telecommunications, rail, airports and ports in 33 OECD members. The paper, the indicators and the underlying data are available on the PMR website. Follow-up work of the NER will pin down how independence, accountability and scope of action are practiced beyond legal and formal requirements.

 

  • Applying better regulation in the Water and Wastewater Sector—The regulation of water services is increasingly important worldwide. A growing number of water regulators have been created in recent years. They share similar goals and common challenges. To help deepen the understanding of the work of these regulators, NER members discussed the final version of the report Applying Better Regulation in the Water Service Sector: the Governance of Water Regulators. The report provides an in-depth survey-based analysis of the governance of 32 water regulators of the NER. The analysis complements the PMR Survey on network regulators – water regulators were not included in the PMR survey – and is a key contribution to an OECD-wide effort supporting Water Governance and Management. An advanced draft of the report was presented at the first International Water Regulators Forum in Lisbon in September 2014. The final report will be launched at the 7th World Water Forum in Daegu-Gyeongbuk, Korea, on 12-17 April 2015. This work provides a solid methodology for undertaking similar in-depth analyses of the governance of regulators in other economic sectors.

 

  • Driving performance of economic regulators-- Measuring regulators’ performance is a fundamental function of a “world class” regulator and can help strengthen the contribution of regulatory policies to sustainable growth and development. However, measuring performance is challenging. The NER has been working on a methodology for assessing how regulators evaluates their own performance. NER members discussed the first application of this methodology to Colombia’s Communications Regulator (Comisión de Regulación de Comunicaciones, CRC). The work highlights the close link between independence and the performance framework of a regulator, the importance of focusing on regulatory tools and processes and measuring their quality to help improve performance, and the need for clear goals and objectives in order to develop output and outcome indicators that can be actionable and useful for the regulator. The report sets a useful standard against which CRC can benchmark its approaches to measuring its performance and is expected to have government-wide spill-over effects as the government of Colombia is promoting better regulation. The report will be released in early 2015. The methodology can be further applied to regulators in other economic sectors.

 

  • Enhancing cross-sector co-operation—Dialogue and co-ordination at the national level across economic regulators can facilitate the development of common approaches where they are possible and enhance synergies and exchange of information. A number of countries have established networks, groups or mechanisms for dialogue. The challenge for these networks and co-ordination arrangements is to maintain momentum and ensure that they bring value to the daily work of regulators by overcoming the bureaucratic challenges that can slow down or limit engagement. NER members discussed the experience of the UK Regulators Network and France’s Club des régulateurs in facilitating co-operation. The NER can be an important partner to these country-level initiatives through analysis, guidance, the development of cross-jurisdictional tools, best practice principles and its role in mobilising expertise and knowledge across sectors and countries.

 

For more information, please contact Faisal Naru.

 

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