Regulatory institutions and structure

Abstract

The main characteristics of a \'good\' or \'sensible\' regulatory system are considered in two dimensions. The first relates to the instruments or legal forms selected to achieve the desired objectives. These should be appropriate in the light of the economic and social justifications for intervention and of their predicted impact on the regulated community. The second relates to the procedures or processes by which the instruments are formulated and applied. Clearly a regulatory regime cannot succeed unless its operation has legitimacy within the community it serves. To this end, certain process values must be recognised, including those of expertise, transparency, and accountability. This paper, drawing on the familiar legal, and legal-policy literature, seeks to summarise the main ideas relating to the two dimensions described and thereby to derive research issues applicable to developing economies. The methodology is derived from what may be described as the sub-discipline of law-and-economics. In relation to regulation, the movement has generated two forms of analysis: public and private interest analysis