Regulatory Governance: Criteria for Assessing the Performance of Regulatory Systems
1 March 1999
By Stuart Holder with former NERA Special Consultant Jon Stern
This paper discusses the main issues affecting the regulatory governance of infrastructure industries and their implications for regulatory practice. The discussion covers the need for economic regulation under both state ownership and private ownership, as well as issues of regulatory commitment, including the role of concession contracts. It then discusses the theory of regulatory governance and its implications for institutional design. On the basis of this discussion, we derive a set of six criteria for appraising the performance of regulatory frameworks for infrastructure industries. These criteria are then applied to a set of twelve infrastructure industries in six developing Asian countries and the authors report the results of the appraisal, including trends towards convergence of regulatory frameworks and the implications for private investment. Among their main conclusions are (i) the importance of structural liberalisation as a catalyst for developing good practice regulation; and (ii) the importance of transparency for effective regulation.
This article was published in Utilities Policy, Vol. 8, No. 1, March 1999.
