Independent Regulatory Agency: Delegation of Powers : Charles University in Prague Faculty of Law Research Paper No. 2019/III/3
Abstract
The existence of independent regulatory agencies - independent bodies which operate at arm's length from the government and which are not directly accountable to the voters or their elected representatives - is still the object of intense debate. Independent regulatory agencies emerge in democratic policies across the world.
It is difficult to find de lege ferenda rationale for their existence in a democracy where public policy is supposed to be made by electorally accountable people and where public institutions are not usually endowed with a high degree of independence. Thanks to economic theories and principles this article reveals a justification of their existence and gives arguments for their creation.
The instrumental rationality problem, the problem of time inconsistency and the credible commitment problem constitute a heavy burden for government in some areas. A delegation of regulatory powers in these areas from the government to an independent body represents a solution to all these problems.
The knowledge gained from economic theories can be beneficial for comprehension of the functioning of independent authorities and for setting their institutional legal framework.