Regulation of sectorial regulators

Amir-Ahmad Zolfaghari, State and Policy Studies Think Tank

While the regulators are responsible for protecting the competitive settings, monitoring the regulated bodies, controlling violations, preparing the setting for implementation of policies and etc., they themselves are required to get regulated by another institution. There is a need to monitor the performance of the sectorial regulators; because sectorial regulators, which are closely interacting with the regulated bodies, might get influenced from their relations. Therefore, the sectorial regulators might deviate from their own task and become more protective of regulated bodies and even intensify the market failure. Moreover, regulator of the sectorial regulators should also work on the formation of sectorial regulators and their administration.

Although we have been able to form the Council of Competitiveness to regulate the regulators and considering its high authority, it has not yet made specific achievements regarding its goals. To understand the causes of this failure we have to diagnose the rationale for formation of such an organization and find out whether it has been an appropriate choice or not. In this regard, there are three types of solutions which are offered by professionals: formation of a super regulator; formation of a supreme council to make policies and do monitoring; constructing instructions and rules for sectorial regulators without formation of any specific super regulator or supreme council.