Delegation and Accountability: Independent Regulatory Agencies in Turkey

Abstract

Delegation of authority to independent regulatory agencies (IRAs) creates a breach in chain accountability established in parliamentary democracies and, hence, necessitates designing different mechanisms of accountability that do not undermine the independence of these agencies. After building a framework to assess the accountability of IRAs across countries and sectors, this article analyzes the formal (statutory) and informal (de facto) accountability of six economic sector IRAs in Turkey. The mechanisms of accountability of IRAs to the legislature, executive, and judiciary are more firmly established in the legal framework than to non‐state actors. Compliance to formal requirements of accountability is high. However, the accountability deficit generated by delegation is not fully eliminated by introducing and effectively implementing a complex network of accountability mechanisms by which the IRAs can be held accountable not only to the three branches of the government, but also to diverse societal actors and to broadly parallel independent institutions.

Acknowledgements

Research for this study was supported by Boğaziçi University, Research Fund, Project No. 06C301, carried out with E. Ünal Zenginobuz.

Notes

1. See Giandomenico Majone, “The Rise of the Regulatory State in Europe,” Western European Politics, Vol. 17 (1994), pp. 77–101; Giandomenico Majone, “From the Positive to the Regulatory State: Causes and Consequences of Changes in the Mode of Governance,” Journal of Public Policy, Vol. 17, No. 2 (1997), pp. 136–67; Kanishka Jarasuriya, “Globalization and the Changing Architecture of the State: The Politics of Regulatory State and the Politics of Negative Coordination,” Journal of European Public Policy, Vol. 8, No. 1 (2001), pp. 101–23; David Levi‐Faur, “The Politics of Liberalisation: Privatisation and Regulation‐for‐competition in Europe’s and Latin America’s Telecoms and Electricity Industries,” European Journal of Political Research, Vol. 42 (2003), pp. 705–40; Paul Cook, Colin Kirkpatrick, Martin Minogue, and David Parker (eds), Leading Issues in Competition, Regulation, and Development (Cheltenham, UK: Edward Elgar, 2004); Fabrizio Gilardi, “The Institutional Foundations of Regulatory Capitalism: The Diffusion of Independent Regulatory Agencies in Western Europe,” The Annals of the American Academy of Political and Social Science, Vol. 598 (March 2005), pp. 84–101; Jacint Jordana and David Levi‐Faur, “The Diffusion of Regulatory Capitalism in Latin America: Sectoral and National Channels in the Making of a New Order,” The Annals of the American Academy of Political and Social Science, Vol. 598 (March 2005), pp. 102–24; Jacint Jordana and David Levi‐Faur, “Towards a Latin American Regulatory State? The Diffusion of Autonomous Regulatory Agencies across Countries and Sectors,” International Journal of Public Administration, Vol. 29, Nos. 4–6 (2006), p. 335–66.

2. The Telecommunications Agency was renamed the Information Technologies and Communication Agency by the Electronic Communication Law of November 2008. In this article, the agency will be referred to by its original name.

3. There is also the Higher Board of Radio and Television (HBRT), which was created in 1994 as an IRA to regulate, oversee, and sanction all entities involved in broadcasting. The HBRT is excluded from the sample as it is functionally differentiated from the economic sector IRAs. In addition, two more recently created regulatory agencies, namely the Sugar Agency (2001) and the Tobacco, Tobacco Products, Alcoholic Beverages Markets Regulation Agency (2002), are also excluded from this study. These agricultural sector agencies were created with very little independence from governmental influence in terms of decision‐making and financial matters; consequently, they do not meet the independence criteria for IRAs. The law that established the Sugar Agency also contained a sunset clause that went into effect at the beginning of 2005, and this agency is now extinct.

4. Mark Thatcher and Alec Stone Sweet, “Theory and Practice of Delegation to Non‐Majoritarian Institutions,” West European Politics, Vol. 25, No.1 (2002), p. 2.

5. Kaare Str⊘m, “Delegation and Accountability in Parliamentary Democracies,” European Journal of Political Research, Vol. 37 (2000), pp. 261–70.

6. Terry Moe, “Interests, Institutions, and Positive Theory: The Politics of the NLBR,” Studies in American Political Development, Vol. 2 (1987), p. 236–99.

7. See Gül Sosay and Ünal Zenginobuz, “Independent Regulatory Agencies in Emerging Economies,” Boğaziçi University, Research Papers, ISS/EC 2005‐10.

8. Gerald Caiden, “The Problem of Ensuring the Accountability of Public Officials,” in J. G. Jabbra and O. P. Dwevidi (eds.), Public Service Accountability: A Comparative Perspective (Hartford, CT: Kumarian Press, 1998), p. 25.

9. Stéphane Jacobzone, “Independent Regulatory Authorities in OECD Countries: An Overview,” in OECD, Designing Independent and Accountable Regulatory Authorities For High Quality Regulation, Proceedings of an Expert Meeting in London, January 10–11, 2005, p. 98.

10. Margot Priest, “An Accountability Framework for Regulatory Agencies and Tribunals,” IPMN Conference Papers (1998), p. 5, available at: www.inpuma.net/research/papers/salem/stanbury.doc

11. Eva Hupkes, Marc Quintyn and Michael W. Taylor, “The Accountability of Financial Sector Supervisors—Principles and Practice,” European Business Law Review, Vol. 16, No. 6 (2005), pp. 1575–621.

12. Colin Scott, “Accountability in Regulatory State,” Journal of Law and Society, Vol. 27, No. 1 (2000), pp. 38–60

13. House of Lords , The Regulatory State: Ensuring Its Accountability, 6^th Report, Select Committee on Constitution (2004), available at: www.publications.parliament.uk/pa/Id200304/Idselect/Idconst/68/6803.htm

14. Scott, “Accountability in Regulatory State.”

15. Giandomenico Majone, “Independence vs Accountability? Non‐Majoritarian Institutions and Democratic Government in Europe,” European University Institute, Working Papers No 94/3 (1994).

16. See Giandomenico Majone, “The Regulatory State and Its Legitimacy Problems,” West European Politics, Vol. 22, No. 1 (1999), pp. 1–24; Thatcher and Stone Sweet, “Theory and Practice of Delegation to Non‐Majoritarian Institutions,” pp. 1–22; Gül Sosay, “Consequences of Legitimizing Independent Regulatory Agencies in Contemporary Democracies: Theoretical Scenarios,” in Dietmar Braun and Fabrizio Gilardi (eds.), Delegation in Contemporary Democracies (London: Routledge, 2006), pp. 171–90.

17. Martin Lodge, “Accountability and Transparency in Regulation: Critiques, Doctrines and Instruments,” in Jacint Jordana and David Levi‐Faur (eds.), The Politics of Regulation: Institutions and Regulatory Reforms for the Age of Governance. (Cheltenham, UK: Edward Elgar, 2004). Also, for a related discussion, see Richard Mulgan, “‘Accountability’: an Ever‐Expanding Concept,” Public Administration, Vol. 78, No. 3 (2000), pp. 555–73.

18. Fabrizio Gilardi, “Evaluating Independent Regulators” in OECD, Designing Independent and Accountable Regulatory Authorities For High Quality Regulation, Proceedings of an Expert Meeting in London, January 10 Gilardi 11, 2005.

19. See Majone, “The Regulatory State and Its Legitimacy Problems,” pp. 1–24; Fritz W. Sharpf, Governing in Europe: Effective and Democratic? (Oxford: Oxford University Press, 1999).

20. Lodge, “Accountability and Transparency in Regulation,” p. 127.

21. Hupkes, Quintyn and Taylor, “The Accountability of Financial Sector Supervisors,”, p. 1591.

22. Ibid., p. 1581.

23. Priest, “An Accountability Framework for Regulatory Agencies and Tribunals,” p. 19.

24. OECD, Designing Independent and Accountable Regulatory Authorities For High Quality Regulation, Proceedings of an Expert Meeting in London, January 10–11, 2005.

25. According to the Turkish Constitution, the Turkish administrative structure is unitary in nature in the sense that the executive branch is to be considered as constituting a whole in relation to all central and other (decentralized) administrative units constituting the state. Therefore, a strict indivisibility of administration is envisaged, and even the agencies with separate public legal personality are considered as being under the tutelage control of the center. In the case of agencies created with their own public legal personality, the indivisibility of administration is established by “relating” the agency to a ministry. The status of “relatedness” constitutes an obvious violation of the notion of independence for an IRA. To get around this issue, the IRAs established later were declared as being “affiliated” with a ministry rather than being “related” to it. This has been a creative piece of lawmaking as there is no previous mention of this notion in the Turkish administrative law.

26. Within the BRSA, a standing Financial Sector Commission, composed of the representatives of the agency, the “affiliated” ministry and state institutions, including the CMB and the CA, as well as the gold and stock exchanges, and sector associations is established by law. However, rather than providing a sanctioned means of consultation for the BRSA, the Commission presents its reports to the Council of Ministers.

27. According to their founding laws, while the institution of financial oversight for the CA, TA, and the PPA was the the Court of Accounts, the EMRA was to be audited by the Supreme Supervision Board of the Prime Ministry, which was originally created to oversee the activities as well as the financial accounts of the state‐owned enterprises in Turkey. On the other hand, the law establishing the BRSA specified that the “affiliated” minister (a minister of state) would have the financial accounts of the agency audited by a committee appointed by the minister himself/herself and composed of an inspector from the Court of Accounts, an inspector from the Ministry of Finance, and an inspector from the Prime Minister’s Office, whereas the law instituting the CMB asserted that the minister has it audited, but it did not specify by whom. The first effort to harmonize the mechanisms of financial accountability for the IRAs in Turkey was the adoption of Law No. 4743 in 2002. It included a paragraph stating that the financial accounts of the IRAs were to be overseen by a commission composed of an inspector appointed by the Prime Ministry, an auditor from the Supreme Supervision Board of the Prime Ministry, and an inspector of the Ministry of Finance. Although this paragraph was annulled by the Constitutional Court a few months after its adoption, this annulment could go into effect upon its publication in the Official Gazette on March 14, 2006.

28. The Court of Accounts, under the Constitution and the Law on the Court of Accounts, is responsible for auditing on behalf of the Grand National Assembly (parliament), the revenues, expenditures, and property of government offices operated under the general and annexed budgets. With the 1996 amendment to its law, the court was also given the task of examining the extent to which the government offices under its jurisdiction use their resources with due regard to economic efficiency and effectiveness.

29. According to the Constitution, the Council of State is the last instance for reviewing decisions and judgments given by administrative courts that are not referred by law to other administrative courts. It shall also be the first and last instance for dealing with specific cases prescribed by law.

30. The terms of the chair and board members of the PPA are non‐renewable by its founding law. By an amendment to the 1999 Banking Law founding the BRSA, the terms of its chair and board members were changed from renewable to non‐renewable in 2005.

31. A board member of the CA mentioned that because of the judicial character of the CA decisions, the Council of the State did not wish to be the primary court of appeals and took it to the Constitutional Court but lost.

32. OECD, Regulatory Policies in OECD Countries: From Interventionalism to Regulatory Governance (Paris: OECD, 2002).

33. OECD, Regulatory Impact Analyses: Best Practices in OECD Countries (Paris: OECD, 1997).