Does formal independence of regulators change? Evidence from Portuguese agencies

Abstract

The rise of the regulatory state has led to the global diffusion of independent regulatory agencies (IRAs). IRAs are the result of the tension between the functional demands of regulatory capitalism and the need of politicians to control policies. Their life cycles have not been linear. Their legal statuses have changed over time, affecting their degrees of independence. This article revisits Gilardi's formal independence index, makes an in-depth diachronic and crosssectorial analysis of 11 regulatory bodies in Portugal, and searches for explanations for the observed variations. It concludes that the formal independence of IRAs tends to increase due to external pressure and the need of governments to project credible commitment, but principals only grant as much independence as they see fit to satisfy those (external) demands (for change).

National de‐delegation in multi‐level settings: Independent regulatory agencies in Europe

“…In the case of IRAs for ‘network’ sectors such as telecoms and energy, politicians might find that IRAs failed to perform useful functions and deliver expected benefits for them, such as greater efficiency resulting in better outcomes (notably lower prices), enhanced credible commitment that allows attracting greater investment, and taking blame for unpopular decisions (cf. Coroado, 2020; Levy & Spiller, 1996; Thatcher, 2002). Politicians might also face higher costs associated with increased ‘agency losses’, that is, the IRA going beyond its ‘zone of discretion’, for instance exceeding its mandate, and acting in ways that are far from the preferences of elected politicians.…”

Modes of regulatory governance: A political economy perspective

“…Methodologically speaking, two articles use a quantitative (Kudrna, ; Wassum & De Francesco, ) and four espouse a mostly qualitative approach (Mizrachy‐Borchovitz & Levi‐Faur, ; Bulfone, ; Coroado, ; Rothstein, Paul, & Demeritt, ). All contributions employ the comparative method.…”

“…All contributions employ the comparative method. More specifically, Bulfone () and Wassum and De Francesco () compare across different countries and sectors; Mizrachy‐Borchovitz and Levi‐Faur (), Kudrna () and Rothstein, Paul and Demeritt () analyze the same regulatory sector in different countries; Coroado () performs a diachronic analysis of several sector regulators in the same country. In terms of geographical variation, European countries are predominant in our sample: only Mizrachy‐Borchovitz and Levi‐Faur () go beyond by including the United States and Israel.…”

“…Most articles seek to explain how institutions and actors (inputs) influence outputs, which we have distinguished between rules that allow or forbid specific behaviors (prescriptive outputs) and rules that create enforcers like regulatory agencies and endow them with powers and competences (organizational outputs). Four articles (Mizrachy‐Borchovitz & Levi‐Faur, ; Bulfone, ; Kudrna, ; Rothstein, Paul, & Demeritt, ) look at prescriptive outputs, while two (Coroado, ; Wassum & Di Francesco, ) focus on organizational outputs, and on the independence and autonomy of regulatory agencies in particular. The relationship between outputs and outcomes, which we found to be rare in regulatory studies in general, is explored by the two contributions (Bulfone, ; Rothstein, Paul, & Demeritt, ) that adopt a more historical‐institutionalist approach.…”

“…As we have already pointed out, different political‐economic factors do not only affect regulatory regimes (prescriptive outputs) but also the way enforcers are set up. Coroado (), in her diachronic analysis of Portuguese regulatory agencies, finds that the general trend toward conferring more independence over time mainly reflects supranational pressures, coming both from political institutions (the European Commission in particular) and from market actors. The relevance of sector‐specific features (their internationalization, their exposure to competition) is confirmed.…”