Date Issued: 
June 1, 2004

Irene Wu

International Bureau Working Paper 1 (June 2004) argues that a regulatory agency’s level of independence can be determined by examining its relationships to three groups (1) other government agencies, (2) the industry it regulates, and (3) the consumers it services. This paper responds to a growing international interest in how to organize independent regulatory agencies for communications markets.

While in the past government departments or ministries were often responsible for regulation, since 1990 the number of independent regulatory authorities has grown from 13 to 119. Furthermore, many states have committed to establishing independent regulators as part of their commitments under the World Trade Organization’s Basic Telecommunications Agreement.

Using two sets of data, an 18-country survey of regulatory organizations, and an in-depth four-country survey of ethics rules and decision-making processes, the paper identifies a number of potential indicators of regulatory independence. Good indicators of the regulator’s independence from other government organizations include an agency leader with a guaranteed term of office, who cannot be dismissed for unpopular decisions; funding which is independent of political review; and a scope of authority that is distinct from the government policy-making agency.
Measures of independence from the industry include whether the incumbent operators are privately owned and whether there is frequent exchange of staff between the regulator and the regulated industry. Indicators of the regulator’s responsiveness to consumer interests include whether there are offices dedicated to consumer affairs and to universal service issues.

Working Paper Link