Regulatory Management: Weaknesses and Potential for Improvement

Designing and implementing a regulatory management system (RMS) that both promotes a country’s socio-economic development and is perceived as legitimate is a fundamental aspect of good governance. This analytical study reviews historical and contemporary theoretical works on the interaction between economic, institutional, and social factors of regulation, with a particular focus on developing countries. It argues that, alongside economic factors, both formal and informal institutional elements must be considered when designing and implementing an RMS – an issue of even greater significance for developing economies. The purpose of the study is to identify key elements and constraints in implementing regulatory governance, including those specific to developing countries, and to situate these within broader governance and management contexts. The research uses both quantitative and qualitative methods, resulting in the ability to triangulate the results. As a result, it proposes an analytical framework that integrates theoretical and practical insights to highlight the weaknesses and potential for improvement in designing and implementing effective regulatory management systems. The research outcome, the confirmation of including formal and informal institutional factors, beyond the purely economic factors, benefits both theory of regulation as well as the regulatory management practitioners.

1. Estache A., Wren-Lewis L. Toward a theory of regulation for developing countries. Following Jean-Jacques Laffont’s lead. Journal of Economic Literature. 2009;47(3):729–770. DOI: 10.1257/jel.47.3.729

2. Laffont J.-J. Regulation and development. Cambridge: Cambridge University Press; 2005. 294 p.

3. Minogue M. What connects regulatory governance to poverty? The Quarterly Review of Economics and Finance. 2008;48(2):189–201. DOI: 10.1016/j.qref.2007.03.002

4. Sumkoski G. Does regulation affect infrastructure investment and output. Evidence from OECD countries and Bangladesh. International Journal of Scientific and Engineering Research (IJSER). 2016;4(12):364–376.

5. Sumkoski G. Are institutions conducive to better regulatory environment in infrastructure? Empirical study of Bangladesh and comparison with OECD countries. Competition and Regulation in Network Industries. 2016;17(1):55–77. DOI: 10.1177/178359171601700103

6. Sumkoski G. Towards socio-economic theory and practice of regulation. Evidence from OECD countries and Bangladesh. Cogent Social Sciences. 2016;2(1):1254840. DOI: 10.1080/23311886.2016.1254840

7. Koop C., Lodge M. Transparency and accountability as anchoring devices for practical philosophy in public management. In: Public administration, public sector reform and corruption. Abingdon: Routledge; 2017:91–107.

8. Stern J. M., Brown K. C., Tenenbaum B. The politics of regulation: Institutions and regulatory reforms for the age of governance. Cambridge: Cambridge University Press; 2006. 352 p.

9. Coglianese C. Regulatory breakdown: The crisis of confidence in U.S. regulation. Philadelphia, PA: University of Pennsylvania Press; 2012. 288 p.

10. Granovetter M. The impact of social structure on economic outcomes. Journal of Economic Perspectives. 2005;19(1):33–50. DOI: 10.1257/0895330053147958

11. Berg S. V. Developments in best practice regulation: Principles, processes, and performance. The Electricity Journal. 2000;13(6):11–18. DOI: 10.1016/S1040–6190(00)00120–2

12. Coleman J. S. Foundations of social theory. Cambridge, MA: Harvard University Press; 1990. 993 p.

13. Levi-Faur D. Regulation and regulatory governance. In: Levi-Faur D., ed. Handbook on the politics of regulation. Cheltenham: Edward Elgar Publishing; 2010:3–21.

14. Jacobs S. H. The regulatory guillotine: A tool for rapid regulatory simplification. Washington, DC: Center for International Private Enterprise; 2003.

15. Fukuyama F. What is governance? Governance. 2013;26(3):347–368. DOI: 10.1111/gove.12035

16. Levy B., Spiller P. T. The institutional foundations of regulatory commitment: A comparative analysis of telecommunications regulation. The Journal of Law Economics and Organization.1994;10(2):201–246. DOI: 10.1093/oxfordjournals.jleo.a036849

17. Eberhard A. The independence and accountability of Africa’s infrastructure regulators: Re-assessing regulatory design and performance. URL: https://www.gsb.uct.ac.za/files/AfurKeynoteAddress.pdf

18. Ladegaard P., Jacobs S. Regulatory governance in developing countries. Cheltenham: Edward Elgar Publishing; 2010. 352 p.

19. Cook P., Kirkpatrick C. Privatization, employment and social protection in developing countries. In: Privatization, enterprise development and economic reform: Experiences of developing and transitional economies. Cheltenham: Edward Elgar; 1998:251-264.

20. Domah P., Pollitt M. G., Stern J. Modelling the costs of electricity regulation: Evidence of human resource constraints in developing countries. 2002. URL: https://scispace.com/pdf/modelling-the-costs-of-electricityregulation-evidence-of-23j2ly7jap.pdf

21. Stern J., Holder S. Regulatory governance: Criteria for assessing the performance of regulatory systems: An application to infrastructure industries in the developing countries of Asia. Utilities Policy. 1999;8(1):33–50. DOI: 10.1016/S0957-1787(99)00008-9

22. Flinders M., Buller J. Depoliticization, democracy and arena-shifting. In: Christensen T., P. Laegreid P., eds. Autonomy and regulation: Coping with agencies in the modern state. Cheltenham: Edward Elgar; 2006:53–80.

23. Bergara M. E., Henisz W. J., Spiller P. T. Political institutions and electric utility investment: A cross-nation analysis. California Management Review. 1998;40(2):18–35. DOI: 10.2307/41165931

24. Gutierrez R., Berg S. Telecommunications liberalization and regulatory governance: Lessons from Latin America. Telecommunications Policy. 2000;24(10–11):865–884. DOI: 10.1016/S0308–5961(00)00069–0

25. Banerjee S., Oetzel J., Ranganathan R. Private provision of infrastructure in emerging markets: Do institutions matter? Development Policy Review. 2006;24(2):175–202. DOI: 10.1111/j.1467-7679.2006.00321.x

26. Rodrik D. Rethinking growth policies in the developing world. 2004. URL: https://scholar.harvard.edu/files/dani-rodrik/files/rethinking-economic-growth-luca-lecture.pdf

27. Thatcher M. Analysing regulatory reforms in Europe. Journal of European Public Policy. 2002;9(6):859–872. DOI: 10.1080/1350176022000046391

28. Zafarullah H. Bureaucratic culture and the social-political connection: The Bangladesh example. International Journal of Public Administration. 2013;36(13):932–939. DOI: 10.1080/01900692.2013.773033

29. Mollah A. H. Administrative reforms and governance in Bangladesh: How far the dream of success? Social Issues and Policy Review. 2014;2(4):26–52.

30. Dubash N. K., Morgan B. Understanding the rise of the regulatory state of the South. Regulation & Governance, 2012;6(3):261–281. DOI: 10.1111/j.1748–5991.2012.01146.x

31. Alam Alam M. R. Challenges and opportunities of HRM practice in public administration: Bangladesh perspective. North South University, Dhaka, Bangladesh; 2015.

32. Zafarullah H. Bureaucratic culture and the social-political connection: The Bangladesh example. International Journal of Public Administration. 2013;36(13):932–939. DOI: 10.1080/01900692.2013.773033

33. Dixit A. Governance institutions and economic activity. American Economic Review. 2009;99(1):5–24. DOI: 10.1257/aer.99.1.5

34. Laporte B. Governance and development. Development Policy Review. 2000;18(3):305–324. DOI: 10.1111/1467–7679.00115

35. Kaufmann D., Kraay A., Mastruzzi M. Governance matters III: Governance indicators for 1996–2002. Policy Research Working Paper. 2003;(3106). URL: https://openknowledge.worldbank.org/server/api/core/bitstreams/fe7c8a73–4ab0–5e4f-9640–8bfaf5c91e4d/content

36. Andres L. A., Guasch, J.L., Azumendi S. L. Regulatory governance: Improving the institutional basis for sector regulation in Latin America. World Bank Policy Research Working Paper. 2008;(4494).

37. Meloni G. Regulatory impact assessment: Towards better regulation? OECD Journal on Budgeting. 2010;10(3):1–36.