Capacity Building through Training and Regulatory Networking

Sanford V. Berg

March 19, 2009 (Geneva)Session 5 Capacity Building for Effective Regulation

Multi-Year Expert Meeting on Services, Development and Trade:The Regulatory and Institutional Dimension

Introduction: Inter-agency Collaborations

• “These government networks are key features of world order in the 21st century. But they are under-appreciated, under-supported, and under-used to address the central problems of global governance.” (Slaughter, 2004: 159)

• They are voluntary, consensus driven, generally lacking in formal treaty status, and (often) focusing on technical issues where cross-nation learning (and tracking) is important

• They focus on Information, enforcement, and harmonization

Training to Promote Professionalism

• Although there are no easy solutions to regulatory problems, the application of core principles and methodologies promotes consistency in decision-making.

• By communicating a vision of sector performance, different stakeholder groups can appreciate that the regulatory commission is trying to balance a set of important objectives.

• Sustainable regulation requires technical skills, communication, and a clear vision.

Training Promotes Renewal

Regulation is a potentially draining profession

• Talented people find themselves fighting fires with obsolete fire-fighting equipment.

Who develops fire-fighting equipment?

• Agencies can identify local universities that have the capacity to offer regulation as a specialty: recruit their students, work with faculty, and create workshops that can energize the operations of regulatory organizations.

Resources for Staff: Continuing Education

• Expertise is needed if commissions are to effectively carry out their responsibilities. The issues associated with infrastructure span accounting, finance, economics, law, engineering, and management. No one person encapsulates all the knowledge required to develop sound rules and implement policies.

• Books and the Internet are useful resources, but they require that professionals have a sound basis for asking questions. Workshops help organizations develop techniques for thinking strategically about regulatory issues.

Regional Infrastructure Networks

Since 1990, at least 17 associations have been formed

Some issues explored here:

• What are the patterns of membership

• What are the primary outputs of such organizations?

Other issues (that could be discussed):

• How have such organizations affected agency activities?

• How have such organizations affected the performance of infrastructure firms?

• What is “best practice” for regional associations?

Regulatory NetworksGlobal Africa

Latin

America

North

AmericaCaribbean

Asia

PacificEurope

Island

Nations

All

Sectors

IFUR

GRNAFUR ___

CAMPUT

NARUCOOCUR

EAPIRF

SAFIR__ ACCC

Energy IEA RERAOLADE

ARIAE__ __

CEER

ERGEG

ERRA

MedReg

NordREG

IAREC

__

Teleco ITU TRASA ARICEA

WATRA

CITELRegulatel

ECTEL SATRCIRG

ERG__

WaterWWC

IWAWUP ADERASA AWWA __ SEAWUN __

Date Organization Seed Money

1889 NARUC

(National Association of Regulatory Utility

Commissioners) Telecom, Energy, , Puerto Rico,

1976 CAMPUT

(Canadian Association of Members of Public Utility

Tribunals) Energy Water, Gas, Pipeline Utilities, and

the

1995 SATRC

(South Asian Telecommunications Regulators’

Council)

ITU

1997 IRG

(Independent Regulators Group) Telecom

EU (European Union)

1997 ARIAE

(Asociación Iberoamericana de Entidades

Reguladoras de la Energía,

Latin-American Association of Regulatory Agencies

for Energy)

Energy Commission of

Spain (CNE)

1997 TRASA

(Telecommunications Regulators Association of

Africa)

USAID, ITU

CTO

Founding Dates of Regional

Regulatory Networks

Date Organization Seed Money

1998 Regulatel

(Foro Latinoamericano de Entes Reguladores

de Telecomunicaciones)

ITU

1999 SAFIR

( Forum for Infrastructure Regulation)

Energy

World Bank, PPIAF

2000 AFUR

(African Forum for Utility Regulators)

World Bank, PPIAF

2000 CEER

(Council of European Energy Regulators),

EU

European Commission

(meetings in 1996 and

1998)

2000 ERRA

(Energy Regulators Regional Association),

central/eastern Europe and the newly

independent states--Energy

US AID and NARUC

Founding Dates of Regional

Regulatory Networks (Continued)

Founding Dates of Regional Regulatory Networks Continued

2001 ADERASA

(Association of Water and Sanitation Regulatory

Entities of the Americas )

World Bank, PPIAF

2002 OOCUR

(Organisation Of Caribbean Utility Regulators)

USAID

2002 ERG

(European Regulators Group) for Electronic

Communications Networks and Services, 2004

European Commission

2003 ARICEA

(Association of Regulators for Information and

Communication Services of Eastern and Southern )

with COMESA

USAID

2003 EAPIRF

(East Asian and Pacific Infrastructure Regulatory

Forum)

World Bank Public

Private Infrastructure

Advisory Facility

(PPIAF).

2006 RERA

(Regional Electricity Regulators Association),

SADC (Southern African

Development

Community)

Forces behind the Creation of Regional Regulatory Networks

Creating Regional Public Goods (Sandler, 2006)

• Networks face a unique set of potential funding groups and beneficiaries

• Physical links and the need for coordination, policy harmonization within regions

• Sources of seed money for institution-building: catalysts or agenda-setters?

• Global vs. regional vs. sector initiatives

Products of Regulatory Networks1) Events and meetings

2) Data for benchmarking

3) Public pronouncements

4) Materials for stakeholders

5) Capacity-building for professional staff

6) Best practice laws, procedures, and rules

7) Regulatory network news

8) Technical studies

(1) Events and Meetings• Non-contributors can be excluded and congestion effects can arise

• The number of technical conferences available to potentially interested parties is vast

• Network of regulators fills a unique niche in the array of events

• Topics, speakers, and formats can be determined by leaders seeking information and fresh perspectives

• Fees for some events, like dinners or plenary sessions for conferences, can be higher for non-members (such as managers of regulated firms)

• To limit perceptions of improper access to regulators, some meetings might be closed to outsiders

(2) Data for Benchmarking

• Task Forces share cross sectional data that are used for comparisons

• This product is particularly important for developing nations where record-keeping has been weak historically

• Benchmarking (yardstick comparisons) compares performance across suppliers

• Eg. ERRA receives some funds by charging for access to benchmarking databases (though this policy limits access)

• AFUR is collecting data

• IBNET and new World Bank Electricity Benchmarking Initiative

(3) Public Pronouncements

• Public statements by regional regulatory networks are unlikely to be highly controversial

• Pronouncements reflect shared views on important issues and identify objectives

• Some statements provide guidelines for strengthening regulatory procedures

• Some pronouncements reflect broad consensus about emerging issues (if not specific strategies for resolving those issues)

(4) Materials for Stakeholders

• Material educates and influences those affected by regulatory decisions

• Outcome: establishes legitimacy for citizens and credibility for investors and ministries (as agencies document procedures and methodologies)

• Documents that are handed down by “outsiders” may not address the unique legal and other institutional features facing nations in a region

(5) Capacity-Building for Professional Staff

• Could be viewed as a private good with standard properties of rivalry in consumption and excludability.

• Case for cost-effective delivery of specialized training via cooperative programs across nations.

• For example, the Organization of Caribbean Utility Regulators (OOCUR) has put on Advanced Training Courses for regulators in the region in collaboration with PURC.

– AFUR has worked with the University of Cape Town

– ADERASA collaborates with UADE

– EU networks (with Florence School of Regulation)

(5) Capacity-Building for Professional (Continued)

• Lack of preparation on the part of participants can water down the value of a training session, but a poor quality leader/trainer can significantly lower the overall quality and usefulness of the program

• Issue: what venues are most appropriate for each region—Specialized masters’ programs, certification programs, short courses, in-house training?

• Issue: How important are scale economies for such programs?

(6) Best Practice Laws, Procedures, and Rules • Address institutional and policy issues on a regional or

global level. Presentations at regional events share best practice

• Tasks range from awarding licenses or concessions, administering rules included in licenses such as tariff levels and adjustments, resolving disputes among the different stakeholders (especially incumbents and entrants—in terms of interconnections and access to bottleneck facilities), monitoring firms’ compliance with regulatory guidelines, and prosecuting and penalizing firms for noncompliance

• Such information must be tailored to fit national contexts

(7) Regulatory Network News

• Product that is similar to events and training

• Professionals gain experience by contributing summaries of national developments

• Information on new books, videos, and other educational material can be supplied competitively

• Regulatory networks can screen, evaluate, synthesize, and promote the use of different types of material

(8) Technical Studies • Studies provide lessons regarding impacts of different policies

• Research as one of the valuable regional public goods

• Studies are often funded by (and sometimes conducted by) donor nations and international organizations

• Regional task forces also give professional staff at national commissions opportunities

• Studies prepared for other jurisdictions have the disadvantage of having a different context, but the advantage of providing fresh (and potentially neutral) approaches to conceptual and quantitative issues

• The PPIAF-funded resource www.regulationbodyofknowledge.org is another vehicle for locating relevant infrastructure studies

Point your browser to http://www.regulationbodyofknowledge.org to access the homepage.

Regional Regulatory Institutions

• The Eastern Caribbean Telecommunications Authority (ECTEL) is a regional telecommunications advisory body for its member countries.

• ECTEL advises governments on regional policy, types of telecommunications services, licensing, fees, pricing, and the management of the Universal Service Fund.

• The Economic Community of West African States (ECOWAS) secretariat is developing an agency that would assist in the regulation of transmission in the region.

Concluding Questions1. What are motives of the founding leaders of networks?

2. What are the optimal funding sources and mechanisms for regulatory networks?

3. What are the ultimate objectives of those providing seed money for these new organizations?

4. Does embedding these networking organizations within larger institutions improve their performance?

5. Is there an optimal region (or number) for networking?

6. What are the impacts of regulatory networking?

7. What types of training programs have been most effective?

Public Utility Research CenterResearch Expanding the body of knowledge in public

utility regulation, market reform, and infrastructure operations (e.g. benchmarking studies of Peru, Uganda, Brazil and Central America)

Education Teaching the principles and practices that support effective utility policy and regulation (e.g. PURC/World Bank International Training Program on Utility Regulation and Strategy, January 2010)

Service Engaging in outreach activities that provide ongoing professional development and promote improved regulatory policy and infrastructure management (e.g. in-country training and university collaborations)

www.purc.ufl.edu