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WHY IS IT IMPORTANT?
Regulators ensure that clean water runs in our taps, the lights remain on, and that financial markets are sound. However, they can fail to deliver these public services if their activities are unduly influenced, whether by the regulated industry, government, politicians or outside interest groups. For example, an electricity rate hike that is justified by the operator’s costs can be opposed by consumer groups or politicians wishing to make hay. Equally, the operator may lobby for higher prices, unnecessarily prioritising shareholders over consumers. There is broad consensus on the need for safeguards against undue influence to maintain regulatory neutrality, and appropriate interactions and mechanisms for engaging with stakeholders, but less on what this means in practice.
CREATING A CULTURE OF INDEPENDENCE: PRACTICAL GUIDANCE AGAINST UNDUE INFLUENCE
Building on its work on the Governance of Regulators and performance assessments of regulatory agencies, in conjunction with its Network of Economic Regulators (NER), the OECD has developed practical guidelines for governments and regulators on how to protect economic regulatory agencies from undue influence. The guidance also aims at helping the executive, legislature, judiciary, industry, consumers, media and interest groups better understand and appreciate the role of regulators and how to interact with them.
STRUCTURE OF THE GUIDANCE
The guidance is structured into five dimensions and proposes some basic and necessary institutional measures as well as more aspirational steps towards bolstering a culture of independence.
This work is based on an analysis of regulators’ institutional processes set out in the Being an Independent Regulator report that discusses the results of a unique and confidential survey of 48 regulators across 26 OECD and non-OECD countries, representing a diverse sectoral and institutional mix.
For further information, please contact Anna Pietikainen, Regulatory Policy Division, OECD.
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|NETWORK OF ECONOMIC REGULATORS||BEHAVIOURAL INSIGHTS||GOVERNANCE OF REGULATORS|
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