Accountability for fairness

Accountability for fairness can take upward, horizontal and downward forms. Political actors may, first of all, have the ability to dismiss the agency head and the board members of the agency in case of misconduct. These provisions are most clearly linked to the element of enforceability. As regulatory agencies are not hierarchically subordinate to a minister, the head and the board members are the officials who carry the final responsibility for the decisions made by the organization and are therefore the key decision-makers. Thus, the power to dismiss these individuals constitutes a severe sanctioning instrument. Typically, a dismissal procedure may only be started in the case of misconduct by

Competition

authorities

Financial market regulators

Number

Percentage

Number

Percentage

Provision absent

6

24

1

4.8

Provision present

19

76

20

95.2

Total

25

100

21

100

Table 4.19 Dismissal of board members

Competition

authorities

Financial market regulators

Number

Percentage

Number

Percentage

Provision absent

5

27.8

1

5.6

Provision present

13

72.2

17

94.4

Total

18

100

18

100

(one of) the officials, and not for political or policy reasons. As Table 4.18 demonstrates, 76 per cent of the heads of competition authorities and 95 per cent of the heads of financial regulators can be dismissed by politicians - usually by the government or a member of the government. Of the regulatory agencies that have a board, the members can be dismissed by a political actor in 72 and 94 per cent of the cases (Table 4.19).

Many regulatory agencies are allowed to draft their own rules of procedure. Upward accountability for fairness also comes in the form of provisions for the approval of these procedures by politicians. As Table 4.20 shows, not all competition authorities and financial regulators are allowed to draft their own rules of procedure: six of the 25 competition authorities, and 13 of the 21 financial regulators, cannot draft such rules. Yet, of the agencies that have these powers, 42 per cent and 39 per cent need to seek political approval of these rules.

Accountability for fairness can also be horizontal in nature. First, as Table 4.21 shows, all agencies are subject to provisions for judicial review. It should be noted, though, that provisions for appeals to the minister (rather than to a court) are present in the statutes of three of the agencies. In those cases, judicial review is the standard, but appealing to the minister is possible in some cases.

Table 4.20 Approval of rules of procedure

Competition

authorities

Financial market regulators

Number

Percentage

Number

Percentage

Provision absent

11

57.9

8

61.5

Provision present

8

42.1

5

38.5

Total

19

100

13

100

Table 4.21 Judicial review

Competition

authorities

Financial market regulators

Number

Percentage

Number

Percentage

Provision absent

0

0

0

0

Provision present

25

100

21

100

Total

25

100

21

100

Table 4.22 Ombudsman procedure

Competition Financial market authorities regulators

Number

Percentage

Number

Percentage

Provision absent

5

20

4

19.1

Provision present

20

80

17

81.0

Total

25

100

21

100

Complaint procedures in which affected parties can turn to a national ombudsman are also common. As Table 4.22 demonstrates, such procedures are found, respectively, in 80 and 81 per cent of the cases.

Finally, two types of provisions for accountability for fairness can be found in the statutes of the agencies: the requirement to publish the rules of procedure and the requirement to publish a register of interests of the head and the board members. First, in cases where organizations are allowed to draft their own rules of procedure, these rules must be published in 42 and 15 per cent of the cases (Table 4.23). Requirements

Competition

authorities

Financial market regulators

Number

Percentage

Number

Percentage

Provision absent

11

57.9

11

84.6

Provision present

8

42.1

2

15.4

Total

19

100

13

100

Table 4.24 Publication of register of interests

Competition

authorities

Financial market regulators

Number Percentage

Number

Percentage

Provision absent

22 88

21

100

Provision present

3 12

0

0

Total

25 100

21

0

to publish a register of interests are much less common, and are only found in the statutes of three competition authorities (Table 4.24).

Let us now look at the variation in the degree to which accountability provisions can be found in the statutes of the independent regulators. To assess the variation in mandatory accountability, a number of accountability indices have been created. These indices cannot give us insight into the question of whether the provisions or items are reliable indicators of a latent trait (or multiple traits); they are intended solely to provide information on the number of provisions imposed on the agencies. Let us first look at the general index of mandatory accountability, which is generated by calculating the average score of the agencies on the whole set of accountability items. As the items are all dichotomous - with provisions being present or absent - the index ranges from 0 to 1. The distribution of the scores is presented in Figure 4.1. The mean score of the agencies on the index is 0.42, with a standard deviation of 0.17. The lowest score is 0.06, while the highest score is 0.84, indicating that none of the agencies are subject to all the provisions we looked at, and that there is a lot of variation in terms of the number of provisions that are imposed on agencies.

Additive mandatory accountability index

Figure 4.1 Additive mandatory accountability index

Table 4.25 Accountability scores per sector

Policy area

Average score

Competition policy

0.41

Financial regulation

0.43

Looking at the variation across sectors, we can see that the average accountability scores of competition authorities and financial market regulators hardly differ (Table 4.25). However, as Table 4.26 indicates, there is considerable variation across countries, with the average scores in countries such as Portugal, New Zealand and Spain being considerably higher than those in countries such as Denmark, Finland, Iceland and Switzerland. These figures suggest that country differences are more importance than sectoral differences, but it should be emphasized that the country scores are based on very few scores per country.

Let us look finally at the different types of accountability. Indices are created for accountability for finances, performance and fairness, and for upward, horizontal and downward accountability. It should be

Table 4.26 Accountability scores per country

Country

Average score

Country

Average score

Australia

0.51

Italy

0.37

Austria

0.36

Luxembourg

0.39

Belgium

0.32

Netherlands

0.50

Canada

0.39

New Zealand

0.66

Denmark

0.18

Norway

0.42

Finland

0.21

Portugal

0.77

France

0.34

Spain

0.60

Germany

0.39

Sweden

0.47

Greece

0.51

Switzerland

0.29

Iceland

0.24

United Kingdom

0.45

Ireland

0.62

Table 4.27 Scores per type of accountability and sector

Policy area

Finances

Performance

Fairness

Upwards Horizontal

Downwards

Competition

0.31

0.41

0.61

0.35

0.91

0.37

policy

Financial

0.31

0.42

0.65

0.39

0.94

0.33

regulation

noted that given that the number of provisions per type of accountability varies considerably, comparing the average scores on the different indices is problematic. We will therefore focus on the variation across sectors and across countries. As Table 4.27 demonstrates, there do not seem to be considerable differences between competition authorities and financial market regulators. At the same time, looking at Table 4.28, the variation across countries seems to be more prominent. Except in the case of horizontal accountability, where scores are high without there being considerable variation, the country patterns we saw before can be observed again. Nonetheless, we shall again emphasize that the country scores need to be interpreted with extreme care as they are based on very few scores per country.

 
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