The Role of Independent Regulatory Agencies in Governance: A Brief Theoretical Review with Application to Electricity and Water in India
Independent regulatory agencies have become an important part of the governance landscape in India and elsewhere. Some regulators have achieved useful outcomes. However, the creation of independent sectoral regulators in India has not been accompanied by critical reflection on their role, or attention to the political, legal, and institutional contexts within which they operate. This study explores various theoretical perspectives on the political economy of regulation, and elaborates on the implications these have for electricity and water regulation in India. The paper focuses on three themes: why governments create independent regulators, the meaning of "regulatory governance" and how it can be improved, and how regulators can address concerns such as social issues embedded in economic decision-making.