Economic regulators play a key role in the delivery of essential services across sectors including energy, e-communications, rail and air transport, and water. They work to ensure people have access to affordable and high-quality services in these sectors, by promoting competition, setting prices, enforcing standards and protecting consumers. Regulators act as rule-setters as well as market “referees”, balancing stakeholders’ interests and hold a unique position among government, industry and citizens. Effective governance arrangements are essential to allow regulators to do their work effectively. Regulators must act objectively, impartially and consistently, avoiding conflicts of interest. Moreover, recent changes in the regulatory framework have expanded their mandates. The green and digital transitions, as well as shocks such as the COVID-19 pandemic and other crises, have meant regulators have seen their responsibilities widening. This reinforces the need for effective governance arrangements.
Independence acts as a safeguard against undue pressure in regulators’ interactions with stakeholders. Between 2018 and 2023, there has been little improvement in the independence of regulators in OECD countries across utility sectors (Figure 8.10). On a scale of 0 to 6, average scores across all sectors rose only slightly from 4.11 to 4.14, or 0.5%. There was a slight increase in the uptake of positive governance arrangements by regulators but overall, legal safeguards to protect independence have improved little. Looking at the average across regulators in OECD countries with data for both 2018 and 2023, scores have remained unchanged in the energy sector (4.36) and water sector (4.39) over this period. The scores for the e-communications, rail and air transport sectors showed a modest improvement, with independence in the e-communication sector increasing from 4.24 to 4.30, rail transport from 4.05 to 4.10 and air transport from 3.67 to 3.70.
Accountability is required to ensure regulators stay within their mandates, and to support their performance. It secures necessary checks and balances, ensuring regulators’ decisions are transparent, predictable and inclusive. Average accountability scores increased by 3% from 4.29 to 4.44 across all utility sectors between 2018 and 2023 (Figure 8.10). This is bigger than the improvement for independence. The most significant improvement was in the air sector, with an increase from 3.74 to 4.01 (7%) between 2018 to 2023. The data also confirm a positive correlation between independence and accountability: regulators that are more independent tend to have more measures in place to hold them to account (OECD, 2025)
There is still room to improve regulators’ independence and accountability arrangements. For example, when it comes nominations for leadership positions, independent panels are only involved for 46% of regulators on average across sectors, either with or without ministerial nominations (Figure 8.11). As the leadership is ultimately in charge of regulatory decisions, government involvement in nominations without sufficient transparency and accountability can create perceptions of undue closeness between regulator and government. The e-communications sector has the greatest share of regulators with leaders who are nominated by government without an independent selection panel (59%).
