CERRE in ICER Chronicle
In this report, we investigate three key features of regulatory agencies: their independence, their accountability, and their perceived quality. We investigate these three factors for regulators drawn from four sectors (telecoms, energy, competition, and rail) and five countries (Belgium, France, Germany, the Netherlands, and the UK). Measurements of accountability and independence are developed, based on the political science literature and legal documents. Regulators’ quality is measured through pairwise peer evaluations, correcting for various possible respondents’ biases. Concerning the links between independence, accountability, and quality, we find that there is both (1) a statistically significant and positive link between independence and perceived quality, and (2) a statistically significant and positive link between accountability and perceived quality. What is more, independence and accountability are themselves positively related. This suggests that robust independence and accountability measures can effectively co-exist and contribute to better outcomes. Accordingly, our study provides empirical support for the EU approach to the design of regulatory agencies, which combines independence and accountability and seeks to find the optimal balance between them.