Regulatory Agencies

8 Key excerpts on "Regulatory Agencies"

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  eBook - ePub

  Encyclopedia of Policy Studies, Second Edition

  • Stuart Nagel(Author)
  • 2020(Publication Date)
  • CRC Press

    (Publisher)

  Proponents of market failure theory sometimes employ it to “explain” the growth of regulation over the past century. Indeed, it is true that, perhaps with some contrivance, many regulatory programs can be shoe-horned into one or another of the categories of failure. If one looks carefully at the historical record, however, what is found is that regulatory programs were sought and justified, not in terms of market failure, but on the basis of such concerns as equity, the control of economic power, protection of the public interest, prevention of destructive or predatory competition, elimination of fraud and deception as unfair or unethical, and the need for social justice. Market failure theory rests largely on the normative premise that efficiency is the desideratum on which decisions on regulatory should be based. In actuality, many other values have much more importantly contributed to the historical expansion of the resultory state.

  III. DIMENSIONS OF THE REGULATORY STATE

  That the national government is now responsible for a vast amount of economic regulatory activity is beyond question. It is not an easy task, however, in limited space, to present a definitive view of the extent and variety of contemporary regulatory programs, let alone provide a good notion of their impact on economy and society. The best I can do is to provide an impressionistic sketch of some of its dimensions.

  One way to provide a rough outline of the expanse or scrope of the regulatory state is to list, as is done in Table 2 , the various national Regulatory Agencies. In developing the list I used the definition of a regulatory agency formulated by the Senate Committee on Government Operations (except for the appointments criterion). The definition reads:

  A Federal regulatory agency … is one which (1) has decision-making authority, (2) establishes standards or guidelines conferring benefits and imposing restrictions on business conduct, (3) operates principally in the sphere of domestic business activity, (4) has its head and/or members appointed by the President … subject to Senate confirmation … and (5) has its legal procedures generally governed by the Administrative Procedure Act.

  The 44 agencies listed under the three categories in Table 2 include all of the major economic Regulatory Agencies and many of the lesser ones. Agencies such as the Bureau of Land Management in the Department of the Interior are not included because their regulationlike activities are tied into their management of public lands and property.

  A regulatory agency’s organization type has importance for its conduct of regulatory activity. Independent regulatory commissions are plural-headed, usually having either five or seven members who are appointed by the president with senatorial consent for fixed, staggered terms of office. No more than a majority of a commission’s members can come from the same political party and they can be removed from office only for specified causes, usually stated as inefficiency, neglect of duties, or malfeasance in office. Decisions of the regulatory commissions are not subject to formal presidential review or approval. Executive bureaus’ location within executive departments puts them in the presidential chain of command; their decisions are open to hierarchical review and coordination. Bureau chiefs are political appointees who serve at the pleasure of the executive. Independent agencies are so designated because they are located outside the executive departments. They do come under presidential supervision, which in practice is going to be much more thorough for the important Environmental Protection Agency then for the little-known National Credit Union Administration, which likely has very little presidential contact. Further on, some more of the implications of agency type will be touched on.

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  Economics for Investment Decision Makers

  Micro, Macro, and International Economics

  • Christopher D. Piros, Jerald E. Pinto(Authors)
  • 2013(Publication Date)
  • Wiley

    (Publisher)

  A regulatory framework develops a set of rules or standards of conduct. Regulations may impose restrictions on and/or mandate how businesses interact with others, including other businesses, con- sumers, workers, and society in general. The regulations may also impose constraints on and/ or mandate how businesses operate internally. It is important for an analyst to understand how regulation may affect the business environment, as well as individual industries or businesses. There is a separate discussion of regulation of financial markets, although that is part of the broad business environment. This section includes an overview of regulation, such as the classification of regulations and regulators, roles of regulations, and regulatory tools. 2.1. Classification of Regulations and Regulators Regulations are sometimes enacted by legislative bodies (often these regulations are laws), but more typically arise from the determination of regulatory bodies. Regulatory bodies may be either governmental agencies or independent regulators (other regulators granted authority by a gov- ernment or governmental agency). Regulatory bodies have legal authority to enact and enforce regulation within the parameters of the mandate given to them. In many instances, a legislative body enacts a statute at a broad level, leaving it to regulatory bodies to fill in implementation details. 2 Courts play a role in regulation as well—helping to interpret regulations and laws, defining permitted and not permitted regulatory practices, and in some instances, imposing sanctions for regulatory violations. Regulations can be classified as reflecting laws enacted by 2 This description by the U.S. Securities and Exchange Commission (SEC) is illustrative of how the process works: “Rulemaking is the process by which federal agencies implement legislation passed by Congress and signed into law by the President.

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  Law and Economics

  • (Author)
  • 2014(Publication Date)
  • Orange Apple

    (Publisher)

  ____________________ WORLD TECHNOLOGIES ____________________ Chapter- 3 Regulatory Economics Regulatory economics is the economics of regulation, in the sense of the application of law by government that is used for various purposes, such as centrally-planning an economy, remedying market failure, enriching well-connected firms, or benefiting politi-cians. It is not considered to include voluntary regulation that may be accomplished in the private sphere. Regulation as a process Public services can encounter conflict between commercial procedures (e.g. maximising profit), and the interests of the people using these services. Most governments therefore have some form of control or regulation to manage this possible conflict. This regulation ensures that a safe and appropriate service is delivered, while not discouraging the effective functioning and development of businesses. For example, the sale and consumption of alcohol and prescription drugs are controlled by regulation in most countries, as are the food business, provision of personal or residential care, public transport, construction, film and TV, etc. Monopolies are often regulated, especially those that are difficult to abolish (natural monopoly). The financial sector is also highly regulated. Regulation can have several elements: • Public statutes, standards or statements of expectations. • A process of registration or licensing to approve and to permit the operation of a service, usually by a named organisation or person. • A process of inspection or other form of ensuring standard compliance, including reporting and management of non-compliance with these standards: where there is continued non-compliance, then: • A process of de-licensing whereby that organisation or person is judged to be operating unsafely, and is ordered to stop operating at the expense of acting unlawfully.

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  Economics for Investment Decision Makers

  Micro, Macro, and International Economics

  • Christopher D. Piros, Jerald E. Pinto(Authors)
  • 2013(Publication Date)
  • Wiley

    (Publisher)

  Regulatory frameworks, among other effects, influence how businesses operate. A regulatory framework develops a set of rules or standards of conduct. Regulations may impose restrictions on and/or mandate how businesses interact with others, including other businesses, consumers, workers, and society in general. The regulations may also impose constraints on and/or mandate how businesses operate internally. It is important for an analyst to understand how regulation may affect the business environment, as well as individual industries or businesses. There is a separate discussion of regulation of financial markets, although that is part of the broad business environment. This section includes an overview of regulation, such as the classification of regulations and regulators, roles of regulations, and regulatory tools.

  2.1. Classification of Regulations and Regulators

  Regulations are sometimes enacted by legislative bodies (often these regulations are laws), but more typically arise from the determination of regulatory bodies. Regulatory bodies may be either governmental agencies or independent regulators (other regulators granted authority by a government or governmental agency). Regulatory bodies have legal authority to enact and enforce regulation within the parameters of the mandate given to them. In many instances, a legislative body enacts a statute at a broad level, leaving it to regulatory bodies to fill in implementation details.2 Courts play a role in regulation as well—helping to interpret regulations and laws, defining permitted and not permitted regulatory practices, and in some instances, imposing sanctions for regulatory violations. Regulations can be classified as reflecting laws enacted by legislative bodies (statutes ), rules issued by government agencies or other regulators (administrative regulations or administrative law ), and interpretations of courts (judicial law ).

  Although government agencies make many regulatory determinations, independent regulators make some regulations. The authority of independent regulators comes from their recognition by a government body or agency, but they are not government agencies per se. One distinction between government agencies and independent regulators is that the latter typically do not rely on government funding. Some argue that an advantage of independent regulators is that they are to some extent immune from political influence and pressure. Some independent regulators are self-regulating organizations

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  Institutional Governance and Regulation of Water Services

  • Michael J. Rouse(Author)
  • 2013(Publication Date)
  • IWA Publishing

    (Publisher)

  In the water sector, even though there is more quality than economic regulation, the word regulation can be seen as economic regulation, so it is important now to give a specific definition to that. WHAT IS ECONOMIC REGULATION? It is important to distinguish between the wider roles of regulators and the aspect which is economic regulation. The World Bank Explanatory Notes [3] discuss “ economic regulation versus regulation generally ” , and conclude with a core definition of economic regulation as “ the rules and organisations that set, enforce and change the allowed tariffs and service standards for service providers ” . The Notes give a valuable illustration of the overlaps with other aspects of regulation, with the source attributed to Castalia, which I reproduce in Figure 2.1. The core definition covers only the non-overlap portion labelled monopoly, but in practice economic regulators also have varying responsibilities for some of the overlaps. I discuss the advantages and disadvantages of aggregation of these functions in a later section. Figure 2.1 Overlap between regulatory functions ( Source : Castalia). Regulation and regulatory bodies 33 WHY NOT SELF-REGULATION? Eijlander [9] gives three characteristics of self-regulation: it concerns the regulation and ordering of behaviour in a certain group of society; it consists of rules which have been laid down for and work within the group; and these rules can be enforced against the group members. In the water sector, forms of self-regulation have been practiced by water service providers for decades through their utility or professional associations, although I doubt that those involved in the early years would have recognised it as self-regulation. Generally this has been limited to technical matters in setting technical standards and codes of practice, although in recent years it has been extended to the establishment and management of benchmarking schemes, as in the Netherlands and Australia.

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  Taming Regulation

  Superfund and the Challenge of Regulatory Reform

  • Robert T. Nakamura(Author)
  • 2003(Publication Date)
  • Brookings Institution Press

    (Publisher)

  Economists seem not to be particularly interested in improving the operation of an enterprise that they regard, at best, with distaste. Lawyers, frequently imbued with a law-and-economics approach to social problems, have either joined the economists in their assault on regulation or focused their energy on administrative law and the legal environment of regulatory administration. Nuts-and-bolts issues of bu-reaucratic administration have never been a particularly hot topic among political scientists. The field has thus been left primarily to students of public administration and public management. 65 Politicians, many of whom undoubtedly prefer continuing the whole-sale movement toward deregulation witnessed in the 1980s, seem to have settled for an approach that simply makes the task of regulating more difficult. The process by which agencies formulate rules and regulations has been made more cumbersome. Executive orders have set procedural roadblocks to new regulations. Authorizing legislation frequently requires agencies to engage in time-consuming and costly cost-benefit and risk-benefit analyses before rules can be issued. Although it is difficult to argue that agencies should not balance costs, risks, and benefits when establish-ing rules, legislative requirements for particular types of formal analysis— subject to judicial challenge if viewed by any party as inadequate—clearly were motivated in part by a desire to limit the scope of regulatory author-ity and make the task of Regulatory Agencies more difficult. Legislative and judicial decisions have broadened substantially the list of necessary participants in the rulemaking process, making it easier for unhappy parties to challenge rules in court and further adding to the costs and uncertainty of regulation. Congress continues to use that ubiquitous, and frequently invisible, tool for punishing agencies involved in unfavored 2,6 REGULATION AND ITS CRITICS activities—budget cuts.

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  21st Century Economics: A Reference Handbook

  • Rhona C. Free(Author)
  • 2010(Publication Date)
  • SAGE Publications, Inc

    (Publisher)

  In the United States (the primary focus in this chapter), there are two primary methods that government has adopted to impact business behavior and market out-comes. The first is referred to as competition policy, or antitrust policy. Competition policy tries to promote eco-nomic efficiency through rules, or codes of conduct, for firm behavior that are designed to restore the market to a competitive, or near competitive, outcome. It is not so much that monopolies are deemed illegal under competi-tion policy, but rather it is more the attempt by a firm or group of firms to monopolize an otherwise competitive market that tends to trigger a government response. In many respects, competition policy tends to be reactive, in that it is prompted by legal challenges to a firm's observed behavior designed to garner market power when competi-tion would otherwise exist. Competition policy is a vast field in economics and is beyond the scope of this chapter. This chapter focuses primarily on direct regulation. Direct regulation is more preemptive in nature. Rules for market outcomes are established by the government. Prices are set, capital investments are subject to oversight, market entry is limited, and often certain types of produc-tion processes are mandated. Such regulation tends to override market outcomes that would have arisen without any such rules. From the perspective of most economists, who would generally prefer that the market allocate resources, the fact that regulation substitutes for market outcomes can be justified only if the market is indeed sub-ject to failure. After a brief review of the regulatory history of the United States, the economic reasons for regulation as well as common types of regulation are reviewed. However, because the economic prescriptions for market failures have not been followed closely in practice, a more formal review of the incentives of regulators to regulate is consid-ered.

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  The Regulatory State in an Age of Governance

  Soft Words and Big Sticks

  • R. King(Author)
  • 2007(Publication Date)
  • Palgrave Macmillan

    (Publisher)

  These agencies generally are not usually fully independent, although they often possess statutory rights and duties, but are appointed and accountable to legislatures through ministers. Such specialized bodies have been regarded as offering more continuous and expert regulation of particular sectors than wide-ranging government departments, and as offering greater prospect of regulatory longevity against the vagaries of electoral cycles, an important source of reassurance for private investors and suppliers in an age of increased privatizations of public assets and global economic interdependency. However, shifting ‘public interest’ responsibilities for critical public services to quasi-autonomous regu- latory agencies and, particularly, contracting their delivery to private, often transnational, actors that operate substantially outside the demo- cratic jurisdiction of domestic states raises repeated issues of public accountability (Dowdle, 2006). Transnationally, within an era of growing multi-level governance, the European Union (EU) has also been described as ‘a regulatory state’ for its reliance on rule-based governance rather than on the macro-economic or redistribution (taxation and expenditure) functions found alongside regulatory governance in the nation state (Majone, 1994). In some views, too, policy communities or sector networks (often public–private) have Regulation as a Mode of Governance 5 taken on wider governance or regulatory state characteristics. These are regarded as having been delegated from an increasingly enabling rather than directing national state (‘steering’ rather than ‘rowing’) that seeks to cope with increased complexity and transnationalism through devolved regulatory governance to expert communities in particular sectors (Haas, 1992; Osborne and Gaebler, 1992; Rhodes, 1997). Defining the regulatory state A number of issues need to be addressed, however, before we can be satisfied with the notion of ‘the regulatory state’.

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