The Accountability of Expertise

Abstract

This chapter studies decision-making behaviour of independent regulatory agencies. Theoretical accounts of delegation to regulatory agencies emphasize that losses of political accountability of regulators are traded off against potential gains in regulatory efficiency. The theory of credible commitment suggests that independent (non-majoritarian) regulatory agencies are more effective in regulating markets than organizations under direct political control. However, independent regulatory agencies operate in a political context and need to demonstrate their benefit to a diverse set of stakeholders, including elected politicians. We are hence confronted with a 'paradox of autonomization' according to which more autonomous public organizations have to take into consideration external demands to a greater degree than less autonomous organizations. Independent regulatory agencies will thus be subjected to high accountability demands. We use the analytical lens of bureaucratic reputation theory to analyse how different types of external demands affect regulatory agencies' attention to stakeholders. The chapter argues that reputation sensitive regulatory agencies will exhibit differential response patterns to negative public judgments, depending on the kind of negative judgments and the type of actor criticizing the regulator. We use systematic media analysis of public judgements and regulators' communicative response, using the financial regulator and the utility regulator (electricity, railways etc.) in Germany as empirical cases. We find that regulatory agencies respond differently to negative public judgments, yet are not more (or less) responsive to political actors' criticism compared to other types of actors. This finding questions independent regulatory agencies' democratic accountability, yet the chapter also suggests that public criticism and debate is only one channel among many others through which regulators are held democratically accountable.