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Independence and accountability of independent regulatory agencies: the case of Turkey

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Abstract

For a long time, governments have delegated their regulatory powers to independent regulatory agencies (IRAs). The aim is to reduce transaction costs and to ensure a credible commitment in the regulatory institutional structure. This paper discusses transition to IRAs in Turkey in terms of independence and accountability. To this aim, we firstly analyze the institutional foundations of transition to IRAs in Turkey from a political economy perspective and then measure their formal independence levels. We find that the pragmatic policies of the incumbent government regarding IRAs negatively influence their independence. This injures the credibility of regulatory commitment and increases the political transaction costs of regulatory process in Turkey.

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Notes

  1. Political property rights are the rights to exercise public authority in certain policy areas. Political property rights can be altered by delegating important powers to non-majoritarian institutions like IRAs (Majone 2001a).

  2. See Çetin (2010) and Çetin et al. (2010) for a detailed discussion about the political economy of transition to IRAs in Turkey. In this paper, in order to make a comparative analysis of different periods in transition to IRAs in Turkey, we heavily follow the approach introduced by Çetin et al. (2010).

  3. We used this conceptual framework in our earlier work. For a more detailed discussion, see Çetin et al. (2010).

  4. In a recent paper, Kyriazis and Metaxas (2013) focus on problems in the commitment literature. However, in this paper, we interest in only regulation of public utilities, because the responsibilities of IRAs heavily include regulation of network industries such as electricity, natural gas, telecommunications, and transportation.

  5. However, active congressional reversal is not necessary; all that is needed is the threat of legislative action (Carroll et al. 1999). Legislative action on the regulatory discretions of the independent agencies is sufficient to injure the independence of IRAs.

  6. See Çetin (2010) and Çetin and Yilmaz (2010) for more detailed analysis of the institutional foundations of economic change after 1980 in Turkey.

  7. See Çetin et al. (2010) and Çetin and Yilmaz (2011) for a more detailed discussion of the relationship between EMRA and Danistay in the energy markets.

  8. On 24 February 2011, Ali Babacan, Deputy Prime Minister of Turkey, declared that `it is time to re-delegate the authority of independent agencies`. http://www.radikal.com.tr/ekonomi/enerji_piyasasinda_ozerklik_tarih_oluyor-1040994.

  9. However, because some articles of this law were annulled by the Constitutional Court, there is a legal ambiguity about the accountability of IRAs, today.

  10. Although the law concerning BRSA contains a provision related to its obligation to provide a report and an analysis of its annual activities to the Parliament, it is also insufficient.

  11. See Gilardi (2002) for more detailed information about scoring the indicators, because we follow Gilardi (2002) to construct the index.

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Authors and Affiliations

  1. Univeristy of California, Berkeley, Berkeley, CA, USA

    Tamer Çetin

  2. Yildiz Technical University, Istanbul, Turkey

    Tamer Çetin

  3. Uludag University, Bursa, Turkey

    M. Zahid Sobacı & Mehmet Nargeleçekenler

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  1. Tamer Çetin
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  2. M. Zahid Sobacı
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  3. Mehmet Nargeleçekenler
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Correspondence to Tamer Çetin.

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Çetin, T., Sobacı, M.Z. & Nargeleçekenler, M. Independence and accountability of independent regulatory agencies: the case of Turkey. Eur J Law Econ 41, 601–620 (2016). https://doi.org/10.1007/s10657-013-9432-x

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