Podcast Summary: What is the Future for Independent Regulators?

Podcast: LSE: Public lectures and events
Host: LSE Film and Audio Team
Guest: Frank Vibert, Senior Visiting Fellow, LSE Government Department
Date: July 27, 2015

Overview

This episode explores the evolving role, challenges, and future of independent regulatory agencies. Frank Vibert, an expert on regulatory agencies and non-majoritarian institutions, discusses why these bodies became a preferred policy tool, their limitations, the expanding scope of their objectives, and how their relationship with politics can be understood and potentially balanced.

Main Discussion Points

The Appeal of Regulatory Agencies

• Expertise & Complexity (00:30):
  • The policy environment has grown so complex that expert input—from natural and social scientists—became essential.
  • Frank Vibert: “Politicians are a pretty ignorant bunch and so it was sensible to look to expert bodies... Politicians have a very short term horizon… for certain types of problems you just need continuity of attention and expert bodies can provide that.”
  • Regulatory agencies can admit failure more readily than politicians, enhancing credibility in complex or contentious areas (e.g., GM wheat trials).

The Spread and Limitations of Regulatory Agencies

• Proliferation Across Sectors (02:01):
  • They've become pervasive, sometimes raising questions about their necessity in areas where expertise or consistency may be less relevant.
  • The move away from “muddling through” (i.e., incremental policymaking by traditional ministries) increased reliance on experts.
• Limitations of Expertise (02:29):
  • Agencies face the same ambiguities and uncertainties as politicians (e.g., predicting economic responses to interest rate changes).
  • Frank Vibert: “Perhaps there was some naivety about how great an improvement expert bodies could bring… There are ambiguities of context, of uncertainties about impact which nobody can really assess, including the expert bodies.”

The Myth of Unified Rationality

• Normative vs. Empirical Views (03:35):
  • Some political scientists idealize centralized, unified rational decision-making—a “normative” dream not supported empirically.
  • Politics operates with heuristics (shortcuts) and is inherently fragmented.
  • Quote: “In the United States, a long political broadcast is a 30 second soundbite. You don’t get much reasoned discourse going on in 30 seconds… It produces polarization rather than bringing people together.” (04:43)

Broadening Objectives of Regulators

• Expansion Beyond Market Oversight (05:40):
  • Regulatory agencies now address climate change, intergenerational justice, and behavior, not just competition or market efficiency.
  • Three main factors behind this expansion (06:20):
    • Difficulty understanding and protecting consumers.
    • Establishing preconditions for markets to function.
    • Addressing behavioral issues essential for markets (e.g., contract enforcement).
  • Frank Vibert: “Markets don't work unless people behave. If you enter into a contract with no intention of keeping a contract, then the contract is meaningless. But markets depend on contracts.”

Dynamics Between Politics and Regulatory Agencies

• Not a Dichotomy (07:46):
  • The relationship between “politics” and “regulators” isn’t static or antagonistic; boundaries shift and responsibilities overlap.
  • Agencies can correct political biases (e.g., admissions, access to health services) and contribute to credibility.
  • Risks: The expanding role of agencies may create system imbalances—an “adaptive bias” where regulators’ forward-looking orientation overshadows politics’ short-term focus.
  • Quote: “There’s no ideal positioning of one vis a vis the other. The relationship will always be changing...” (08:17)

Constitutional Solutions and Systemic Balance

• Formalizing Relationships (09:30):
  • Constitutional arrangements are key to defining—and containing—the boundaries between regulators and politics.
  • Requires moving beyond “18th century models” to cope with modern complexity.
  • Frank Vibert: “Systems relationships are to be held in place or monitored through constitutions.”

Notable Quotes & Memorable Moments

• On Trust in Experts vs. Politicians (01:00):
  “Nobody trusts a politician. They don’t necessarily trust experts either. But between the two evils, you might go for an expert.”
• On Limitations of Rational Politics (04:30):
  “It’s a communication of shortcuts and it produces polarization rather than bringing people together.”
• On Expansion of Regulatory Purposes (06:49):
  “Regulators have had to move to essentially represent what they consider to be the best interests of consumers...”
• On the Role of Constitutions (09:44):
  “We have to think a bit more about the content of constitutions as a way of containing the habits and practices of modern government.”

Key Timestamps

• 00:30: Why regulatory agencies became attractive policy tools
• 02:29: Real-world limitations and challenges facing expert bodies
• 03:58: The draw—and problematic nature—of “unified rationality”
• 05:40: How and why regulators’ objectives have broadened
• 07:46: The evolving, dynamic relationship between politics and agencies
• 09:44: The potential constitutional fixes to regulator-politics dynamics

Conclusion

Frank Vibert provides a nuanced analysis of independent regulators: their necessity in a complex world, their limits, how their missions have evolved, and the risks posed by their expanding reach. He emphasizes the need for constitutional frameworks that reflect today’s regulatory realities rather than outdated models, warning of imbalances if the relationship between politics and agencies isn’t carefully maintained. This conversation is essential listening for anyone concerned with the future of governance in an era of increasing technical and political complexity.