Independent Regulatory Agency: Delegation of Powers

14 Pages Posted: 4 Oct 2019

See all articles by Eliška Klimentová

Eliška Klimentová

Charles University in Prague - Faculty of Law

Date Written: October 2, 2019

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.

Keywords: independent regulatory agency, IRA, delegation of power, transaction costs, instrumental rationality, time inconsistency, credible commitment

Suggested Citation

Klimentová, Eliška, Independent Regulatory Agency: Delegation of Powers (October 2, 2019). Charles University in Prague Faculty of Law Research Paper No. 2019/III/3 . Available at SSRN: https://ssrn.com/abstract=3464160 or http://dx.doi.org/10.2139/ssrn.3464160

Eliška Klimentová (Contact Author)

Charles University in Prague - Faculty of Law ( email )

Nam. Curieovych 7
Praha, 11640
Czech Republic

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