The Weight of Political Accountability on Regulatory Decisions 

In their empirical analysis, Gasmi, Noumba Um and Recuero Virto (2009) explore the relationship between regulatory performance, proxied by telecommunications outcomes, and political accountability, captured by variables on corruption, bureaucracy, law and order, expropriation, currency risk, and checks and balances. The authors find a relatively weak effect of political accountability on the performance of regulation in developed countries, but a clearly strong effect in the case of developing countries where the greater the political accountability, the better the regulatory performance. These quantitative results suggest that in developed countries political accountability is already well established and practiced through the electoral process. The findings suggest that the focus in those countries should be on the governance structures of the regulatory institutions themselves. In developing countries, political accountability is at an early stage of development and hence this calls for additional means and resources from development partners to promote good governance which will in turn enhance the quality of regulation. Indeed, building regulatory institutions in developing countries should be part of a broader strategy of “good governance” and not only be considered, as it has been in the past years, as a sectoral matter. Consequently, international donors, including the World Bank, the Department for International Development, and others have been strong advocates for good governance since many years

Source: Gasmi, F., Noumba Um, P. and L. Recuero Virto (2009), “Political Accountability and Regulatory Performance in Infrastructure Industries: An Empirical Analysis,” World Bank Economic Review 2591.