Ensuring Sound Regulatory Processes: For a Principled Approach

Abstract

Over the past three decades, Member States have created a variety of regulatory authorities, generally in response to the adoption of liberalization directives by the European Union. Because of the substantial power they enjoy and the importance of their tasks, it is widely recognized that it is important to ensure that these authorities are institutionally designed in a manner that ensures their independence and accountability (“design principles”). This paper, however, focuses on another, complementary, set of principles, which seeks to ensure that these agencies apply sound regulatory processes (referred to as “regulatory process principles”) once they have been set up. In this context, this paper identifies and explores four principles that are related to regulatory processes and which constitute minimum requirements to be complied with by regulators, i.e., the principles of (i) participation, (ii) openness and transparency, (iii) legal certainty and predictability, and (iv) efficiency. As discussed in this paper, regulatory process principles can be justified in two distinct ways. First, compliance with these principles is often essential to protect individual rights and participatory democracy. But it can also be justified on a utilitarian basis as the application of these principles can also generate better regulatory outcomes. It therefore should not come as a surprise that multilateral organizations, the European Union, Member States governments and courts have contributed to the development of these principles and adopted mechanisms to ensure that regulatory authorities comply with them.