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Delegation and Accountability: Independent Regulatory Agencies in
Turkey
Gül Sosaya
a
Department of Political Science and International Relations, Boğaziçi University, Istanbul
To cite this Article Sosay, Gül(2009) 'Delegation and Accountability: Independent Regulatory Agencies in Turkey', Turkish
Studies, 10: 3, 341 — 363
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Turkish Studies
Vol. 10, No. 3, 341–363, September 2009
Delegation and Accountability:
Independent Regulatory Agencies
in Turkey
GÜL SOSAY
Department of Political Science and International Relations, Boğaziçi University, Istanbul
geb[vre]
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GülSosay
30Taylor
10
[email protected]
00000September
&
Francis
Turkish
10.1080/14683840903141624
FTUR_A_414335.sgm
1468-3849
Original
2009
and
Studies
Article
(print)/1743-9663
Francis2009
(online)
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.
The practice of delegation of authority to independent regulatory agencies (IRAs),
which dates back to the establishment of the Interstate Commerce Commission as
the first of the major federal independent regulatory commissions in the United
States in 1887, has spread across countries and sectors, in particular since the
1980s.1 Within this context, six economic sector IRAs have been established in
Turkey. The Capital Market Board (CMB), which became a bona fide IRA in 1999,
after extensive amendments to the Capital Market Law, was the first public institution founded as a semi-independent regulatory agency in 1981. Subsequently, in
order to implement the Competition Law of 1994, the Competition Agency (CA)
was created and started its operations in 1997. In 2000, the laws instituting the
Banking Regulation and Supervision Agency (BRSA) and the Telecommunications
Agency2 (TA) came into effect. This was followed by the establishment of the
Energy Markets Regulatory Agency (EMRA) and the Public Procurement Agency
(PPA) in 2001 and 2002, respectively.3 After building a general framework that can
be employed to study the accountability of IRAs, this article aims to assess the
Correspondence Address: Gül Sosay, Department of Political Science and International Relations,
Boğaziçi University, Bebek 34342, Istanbul, Turkey. Email:[email protected].
gevb][r
ISSN 1468-3849 Print/1743-9663 Online/09/030341-23 © 2009 Taylor & Francis
DOI: 10.1080/14683840903141624
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342
G. Sosay
formal (statutory) and informal (de facto) accountability of these six economic
sector agencies in Turkey.
Involving legally mandated transfers of authority away from representative
bodies to agencies as “governmental entities that (a) possess and exercise some
grant of specialized public authority, separate from that of other institutions, but (b)
are neither directly elected by the people, nor directly managed by elected officials,”4 delegation to IRAs constitutes an anomaly that does not fit well into the
constitutional framework of controls, checks, and balances set up in a parliamentary
democracy. The ideal typical parliamentary democracy rests on a chain of delegation and accountability between principals and agents. In this configuration, the
chain of delegation from the voters to elected representatives, from legislators to the
executive branch—specifically to the head of government (the prime minister)—
from the prime minister to the heads of different executive departments (ministers),
from the ministers to their bureaucracies is mirrored by a corresponding chain of
accountability running in the reverse direction.5 As delegation of authority to IRAs
creates a breach in these standard chains of delegation and accountability, securing
the accountability of IRAs without undermining their independence constitutes a
challenge for parliamentary democracies such as Turkey.
The challenge may be effectively addressed by designing mechanisms of
accountability ensuring that nobody controls the IRAs while keeping them “under
control.”6 This ideally involves the replacement of centralized and hierarchical
ministerial accountability with a complex network of accountability mechanisms
focusing on compliance with rules and ethical principles and on achievement of
results. As there is agreement on this general principle, how it is legally formalized
and put into practice varies across countries and IRAs in different sectors. Hence,
systematic analyses of both formal and informal accountability of IRAs across
countries and sectors are necessary.
Analysis of formal accountability entails an examination of the legal framework
instituting the accountability regimes for the IRAs. Since the laws establishing the
six economic sector IRAs in Turkey were formulated in consultation with and under
the surveillance of international institutions, most prominently the European Union
(EU), the International Monetary Fund (IMF), and the World Bank,7 the institutional designs of these IRAs cannot be regarded as being peculiar to their national
context. In other words, an analysis of the formal mechanisms of accountability set
up for the six economic sector IRAs in Turkey can shed light on cases elsewhere, as
these mechanisms were designed with reference to the relevant regional/international standards actively promoted and spread by the aforementioned international
institutions across national boundaries.
Informal accountability, on the other hand, refers to accountability in practice. In
evaluating the informal accountability of the six economic sector IRAs in Turkey,
this study focuses on the implementation of the legally established framework and
relies on analyses of the IRA websites, documents, and publications and on semistructured face-to-face interviews, conducted under the condition of anonymity,
with current and former board members, presidents, expert staff of the IRAs, and
Delegation and Accountability 343
independent academics who are close observers and/or former advisors of the IRAs
concerned.
The article proceeds in three steps. The next section offers a conceptual and
analytical framework to assess the accountability of IRAs. In the subsequent
section, this framework is used to present and evaluate the mechanisms of accountability formally established for the Turkish economic sector IRAs. The third section
focuses on the informal accountability of these agencies. The article concludes by
highlighting the main problems and difficulties involved in ensuring the effective
accountability of IRAs in Turkey.
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Accountability of Independent Regulatory Agencies
Accountability is a concept that is not easy to define in a few words. Caiden holds
that “to be accountable is to answer for one’s responsibilities, to report, to explain, to
give reasons, to respond, to assume obligations, to render a reckoning and to submit
to an outside or external judgment.”8 More specifically, in his overview of IRAs in
Organization for Economic Co-operation and Development (OECD) countries,
Jacobzone defines accountability as “an obligation to explain, answer for, and bear
the consequences of the manner in which the regulator has discharged duties, fulfilled
functions and utilised resources.”9 While these definitions offer a conceptual understanding of accountability, a general framework that is tailored to empirically study
and evaluate the accountability of IRAs should be more specific so as to differentiate
who is accountable to whom, for what, and by what means or mechanisms and thus
provide a more complete picture of accountability within a specific regulatory
regime. Based upon pre-existing literature focusing on the issue of accountability in
the institutional design of IRAs, this section first presents a discussion around these
key questions so as to reveal the fundamental concerns and requirements in designing
an effective accountability regime. Subsequently, accountability is operationalized
and a list of indicators are provided to empirically study and assess the accountability
of IRAs.
Who is Accountable?
Powers are delegated to IRAs as institutions, rather than to individuals that occupy
positions within these institutions and regulatory decisions and activities involve
collective and collaborative work. Hence, IRAs as institutions or “corporate bodies
organized to perform particular functions,”10 rather than individual regulators, are to
be the accountees. Although this may make it difficult to distinguish who is actually
responsible for IRA decisions and actions and thus must be held accountable,
formalization of institutional accountability, rules on immunity, and limited liability
of regulators (except that which is provided by administrative law) are correlates of
independence and are justified by the need for effective regulation. The likelihood of
direct legal actions against them can dissuade the regulators from acting promptly
and decisively, and consequently, they adversely affect the quality of regulatory
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G. Sosay
outputs.11 Therefore, formally including personal accountability for regulatory
outputs and overall performance is not prescribed in the institutional design of IRAs.
To Whom Are IRAs Accountable?
Since the 1980s, the networks of accountability in regulatory regimes have extended
so much as to justify Scott’s model of “redundancy”12 applicable to some. Within
this context, formulation of accountability as a vertical and linear relationship
between principals and agents can offer only a partial answer to the question
“accountable to whom?” “The 360° view of accountability” formulated by the
British House of Lords clearly demonstrates the multitude of actors with which
IRAs are in a relationship of accountability13 (see Figure 1).
In analyzing to whom IRAs are accountable, Scott presents a view of accountability in three dimensions: upwards, horizontal, and downwards. In “upwards” accountability, which corresponds to the simple vertical relationship between principals and
agents and to the shaded boxes in Figure 1, accountability is rendered to a higher
authority. “Horizontal” and “downwards” accountability involve accountability to
broadly parallel (e.g. independent monitoring or appeal bodies, audit offices,
ombudsmen) and lower level institutions and groups (e.g. consumers, interest
groups), respectively.14
First and foremost, IRAs are designed to be accountable to the three branches of
government, namely the legislature, the executive, and the judiciary (“upwards”
accountability). This is essential to ensuring that regulatory activities correspond
with the democratic will that is represented by these institutions and that IRAs do
not emerge as a “fourth branch” operating independently from the system of checks
and balances in a representative democracy.
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Figure 1. The 360° view of accountability. The shaded boxes comprise the bodies that exercise power directly in relation to the regulators. Citizens, consumer bodies, and regulated bodies lack the power to summon regulators to justify their actions. Source: House of Lords (2003).
Figure 1. The 360° view of accountability. The shaded boxes comprise the bodies that
exercise power directly in relation to the regulators. Citizens, consumer bodies, and regulated
bodies lack the power to summon regulators to justify their actions. Source: House of Lords
(2003).
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Delegation and Accountability 345
As IRAs have evolved, increased in number, and diffused across sectors, the
inadequacy of traditional hierarchical mechanisms of accountability between principals and agents with delegated powers, and thus, the necessity of establishing a
network of complementary and overlapping checking mechanisms,15 have become
increasingly evident. One of these mechanisms involves extension of accountability
in regulatory regimes to specially established independent monitoring or appeal
bodies, audit offices, and ombudsmen (“horizontal” accountability). Even though
these institutions often do not have the formal authority to control and sanction
regulators, they perform crucial functions, such as scrutiny and formal review.
Therefore, such bodies should also be included in the 360° view of accountability.
Moreover, the controversy around the democratic accountability and legitimacy of
IRAs16 has contributed to bringing the stakeholders, namely the regulated industries,
consumers, and the general public, into the framework of accountability. In addition
to being indirectly accountable to the stakeholders constituting the electorate, via
their elected representatives in the parliament, it is prescribed that regulators should
be made directly accountable to them (“downwards” accountability). Consequently,
mechanisms of accountability that provide information and representation to specific
stakeholders and citizens en masse and voice and choice to individuals for their
discretionary use have been incorporated into regulatory regimes.17
Accountable for What?
This has been one of the most challenging questions in designing effective accountability regimes for IRAs. Firstly, because IRAs are created primarily to promote
effective regulation much emphasis has been put on accountability for regulatory
outcomes. There is also consensus that regulatory outcomes should be evaluated on
the basis of whether IRAs meet the objectives they have been assigned. The basic
requirement for such an evaluation is that these objectives must be clearly identified
by laws or statutes establishing these agencies.
Based on a survey of relevant literature, Gilardi provides a comprehensive list of
rationales for the establishment of IRAs.18 They are, namely, increasing expertise,
flexibility, credibility, stability, efficacy and efficiency, public participation, and
transparency; reducing decision-making costs and political uncertainty; and blameshifting. Differentiating the reduction of decision-making costs and political uncertainty as well as blame-shifting as positive arguments that aim to explain, rather than
to provide prescriptions for action, and underlining the methodological difficulty of
determining if IRAs have led to increased expertise, flexibility, credibility, and
stability in the regulatory process, he argues that the best way to evaluate regulators
with respect to their output is to focus on efficacy and efficiency, that is, their impact
on market performance.
Nevertheless, output-oriented accountability based on the criteria of whether and
to what extent IRAs fulfill their legally specified objectives by itself cannot guarantee
democratically accountable and legitimate governance. Many scholars of IRAs
emphasize procedural accountability as a standard that complements output-oriented
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G. Sosay
accountability and, hence, helps resolve the controversy around the legitimacy of
IRAs in parliamentary democracies.19 From this perspective, regulators are to be held
accountable for their activities and actions in the decision making and implementation processes. This involves determining whether regulators have followed the rules
of conduct and decision-making or met the process requirements that are established
by law or statute. Within this framework, legality and fairness are the primary values
for which regulators are accountable. Accountability for the budget and financial
accounts that are sometimes separately listed can also be regarded as a subcategory
under accountability for process.
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Accountable by What Means or Mechanisms?
In order to ensure the accountability of IRAs, the first requirement is that delegated
powers, objectives, roles, responsibilities, and decision-making processes of IRAs
must be clearly specified in laws. In other words, a legal framework that explicitly
specifies who is accountable to whom and for what as well as how decisions and
actions are to be taken is the first condition that must be met in designing accountable as well as independent IRAs and ensuring accountability for both process and
output.
Another general condition that must be incorporated into the design of mechanisms of accountabilility in regulatory regimes is transparency. The regulators cannot
be fully held accountable when their regulatory activities are not made transparent—
accountability presumes transparency. In practical terms, this involves creating regulatory regimes with “prescribed standards of making regulatory activities accessible
and assessable”20 to all the actors to whom IRAs are accountable. Otherwise, lack of
information and/or potential information asymmetries can undermine accountability.
When the intent is limited to making regulatory activities accessible, transparency
can be attained by providing and publicizing information about regulatory activities
and decisions. Obliging IRAs to publish regular formal reports and financial statements, to write explanations of deliberations, proceedings, and specific decisions,
and to respond to requests for information is the primary means of doing this. These
mechanisms of transparency are crucial for both ex ante and ex post accountability,
as the IRAs are obligated to report before and after action is taken.
To make regulatory activities “assessable” as well as “accessible,” the “addressees” of these aforementioned documents should also be taken into account. When
they are addressed to specialized bodies they may and in most cases are expected to
include, for example, economic information, such as data, models, and forecasts, that
can be grasped and evaluated only by experts. On the other hand, when the objective
is disclosure and dissemination of information to the “laypeople” to whom IRAs are
accountable, such as consumers and the general public, written and oral statements
(e.g. press statements) should be formulated in a language understandable to those
who are not experts.
Merely obliging the IRAs to be transparent is not sufficient to alleviate the concerns
about their democratic accountability and legitimacy. Hence, other mechanisms that
Delegation and Accountability 347
enhance democratic accountability but avoid undermining the independence of regulatory agencies are introduced. One such mechanism is the institutionalization of
appointment, reappointment, and dismissal procedures by which the senior officials
of IRAs are appointed, reappointed, and dismissed by the government or the head of
state upon recommendation by the finance minister or the government. While the
governmental appointment of senior regulators serves to strengthen their position,
particularly in relation to the regulated industries, according to Hupkes, Quintyn, and
Taylor:
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[r]eappointment and dismissal procedures may be looked at as mechanisms of
personal accountability, and reappointment of officials, in principle, could
function as a mechanism of ex post accountability by which an official could
be dismissed on grounds of bad performance.21
Regulatory policies and decisions that involve value judgments that affect the
welfare of the stakeholders may inevitably have redistibutive effects. While
making IRAs accountable for their regulatory outputs may provide channels
through which these actors can contest them after a decision is made or an action
is taken, the requirements of democratic legitimacy may be interpreted to also
include ex ante accountability. Whether, how, and how much the stakeholders
and the public (directly or through their elected representatives) are not only
provided information but also represented in the process, allowed to participate,
and consulted before a decision is made or an action is taken, should also be
taken as measures in evaluating the accountability of IRAs. Hence, various
means of representation, participation, and consultation are incorporated into
regulatory regimes.
Representation of the parliament and/or the stakeholders in advisory and/or
supervisory boards/committees of the IRAs provides a channel through which the
representatives of the general electorate and those who are directly affected by
regulatory actions and decisions can participate in the regulatory process. Consultation with the parliamentarians and the stakeholders is expected to take place
mainly in the boards/committees where they are represented. Appearances before
the parliament and ad hoc inquiries also provide a means of consultation and an
opportunity for the parliament to probe and criticize regulatory activities. Whether
consultation is obligatory or optional, whether advisory and/or supervisory boards/
committees are standing or ad hoc, and whether the appearances before the
parliament are regular or ad hoc can be used as indicators of accountability.
While the regulators are generally expected to include an overall economic
assessment in their annual reports prepared for those to whom they are accountable,
some additional mechanisms are often established to secure the budgetary and
financial accountability of IRAs. The review of the annual accounts and balance
sheets by a national audit office, independent auditors, such as private consulting
firms and academic experts, and/or internal inspectors is often required to ensure
good governance. The more independent and objective the audits, investigations,
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G. Sosay
and other reviews are, the more effective the mechanisms of financial accountability
are considered to be.
With the exception of reappointment and dismissal procedures, the mechanisms
of accountability introduced thus far do not involve punishment. While these mechanisms are necessary they are not sufficient to assure accountability. The obligations
to report, to explain, to consult for advisory opinions, and to be audited do not go
much beyond providing transparency and access in the absence of formal and
authoritative appeal and sanctioning mechanisms. Such mechanisms are provided
primarily within the framework of judicial accountability and, in some cases,
through special appellate, governmental, or ministerial bodies.
Regulators are legally obligated to act within their powers and to observe due
process requirements. As agents in the administrative structure, individual regulators are not immune from the provisions of administrative law and thus can be
penalized for abuse of power and administrative misconduct by administrative
courts. Moreover, the regulators’ compliance with the procedural provisions of the
IRA-specific legal documents is made subject to the supervision and review of
courts, special appellate, or quasi-judicial governmental/ministerial bodies.
Noncompliance is a ground for appeal or challenge and for the overturn of a regulatory decision. This is a mechanism that is designed to enhance accountability for
process.
A similar mechanism may allow appeals for errors of fact as well as on the merits
of regulatory decisions including their legality and fairness. In this mechanism,
those affected by regulatory decisions are granted the right of redress in the court or
other bodies of appeal that can overturn decisions when they are found not to meet
the requirements of legality and/or fairness.
On the other hand, appeals and sanctioning based on the market performance of
IRAs are constrained by the discretion conferred on regulatory agencies as independent institutions with broad delegated powers. In democracies, the principals have
the authority to revise and repeal the laws and statutes of IRAs as well to dismiss or
not reappoint the regulators. In some systems, the principals may also have the
authority to cut the agencies’ budgets and other resources. However, the tension
between independence and accountability constrains the principals’ ability and
inclination to hold the regulators liable for and sanction institutional (or personal)
failures in the substantive quality of regulatory decisions in relation to the marketrelated objectives the IRAs are mandated to achieve. The methodological and
practical difficulties involved in evaluating the market performance of IRAs that
are often established to carry out multiple functions and accomplish multiple
objectives and that “may compete with other regulatory authorities”22 in achieving
those objectives also create complications and make it difficult for the principals to
measure IRAs’ performance against their mandates and punish them for
institutional (or personal) failures.
Furthermore, the aforementioned sanctioning mechanisms for market-performance, even when/if they are activated, may or may not be viewed as measures that
directly and solely penalize such failures. In other words, such sanctions rarely
Delegation and Accountability 349
“provide an undiluted message to the agency and its members.”23 For instance, legal
amendments, reappointments, and dismissals may be due more to the principals’
political considerations than to an IRA’s market performance; changes in the
agency’s budget and other resources may result from the need to introduce further
fiscal discipline by reducing public expenditures. In sum, while laws establish the
essential safeguards for both the independence and accountability of IRAs, all the
difficulties and dilemmas regarding how to assure their accountability without
undermining their independence in practice can hardly be resolved by formal
measures only.
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Operationalization of Accountability
There is an increasing effort by both scholars and policy analysts to operationalize
and measure the accountability of IRAs. Using published and internet sources, the
OECD Secretariat prepared an inventory of regulatory authorities in 2003–2004. As
a comprehensive tool for documenting regulatory regimes in member countries, the
OECD inventory also includes variables and questions addressing accountability.24
Gilardi, in a paper attached to this OECD document, presents a list of indicators and
questions that can be used to empirically assess and compare accountability across
regulatory regimes. Building upon pre-existing work and integrating the specific
elements of the key questions discussed above, this study relies on the indicators
listed in Table 1 to evaluate the formal accountability of six economic sectors IRAs
in Turkey.
Formal (Statutory) Accountability of Independent Regulatory Agencies
in Turkey
The level of specification varies across laws institutionalizing economic sector IRAs
in Turkey. As of 2009, there is no consistent and standard legislative formulation in
which the institutional characteristics, decision-making processes, mechanisms of
accountability, and objectives of the aforementioned IRAs are identified. There is
also variation in the degree of clarity and specificity in their founding laws. While
the points of comparison and contrast in the legally mandated mechanisms of
accountability will be presented at length below, the two observations that are
common to all six economic sector IRAs in Turkey should be underlined at the
outset. The first is that decision-making procedures of their boards are clearly
spelled out in their founding laws. Second, although the IRA objectives are unambigously stated at a general level, there is no prioritization of these objectives in these
documents. These shared characteristics are critical in the implementation of
mechanisms of accountability for process and outcome.
In Turkey, except the CMB, which itself is structured as a board, all economic
sector IRAs rest on a distinction between the agency and its board as the decisionmaking organ. The members and chairs of the boards are appointed by the Council
of Ministers from among the candidates proposed by selected ministeries, state
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Table 1. Operationalization of Formal (Statutory) Accountability
1) Does the law (or statute) institutionalizing the IRA clearly specify the accountees, the
accountability holders, decision-making procedures, and mechanisms of
accountability, as well as unambigously define, and in case of multiple objectives,
prioritize the objectives of the IRA?
2) Is an individual (e.g. the chair of the IRA) or a board/commission rather than the IRA
as an institution specified as being accountable?
3) Is it an individual or a board/commission who assumes the legal personality of the
IRA and, hence, is held accountable?
4) Is the administrative personnel of the IRA accountable for personal conduct under
administrative law?
5) What are the formal obligations (in law or statute) of the IRA vis-à-vis the
government (executive)?
6) What are the formal obligations (in law or statute) of the IRA vis-à-vis the parliament
(legislature)?
7) If there is a reporting requirement to the government and/or to the parliament, should
reports cover financial accounts?
8) If there is a reporting requirement to the government and/or to the parliament, should
reports cover an evaluation of regulatory performance, including an assessment of
whether and to what extent the objectives stipulated in law or statute have been
achieved?
9) Is the IRA obliged to make the basic data and the formal economic models it uses for
regulatory policy publicly available?
10) Is the IRA obliged to publish and publicize its own economic forecasts?
11) Is the IRA obliged to provide an explicit rule or strategy that describes its policy?
12) Is the IRA obliged to disclose how each decision has been reached?
13) Is the IRA obligated to use procedures for making regulation known and accessible
to affected parties?
14) Is the IRA subject to plain-language drafting requirements?
15) Is the IRA obliged to explain its decisions during a specific time period?
16) Is the IRA obligated to consult advisory boards/committees before a decision or
action is taken?
17) Which groups are represented in these advisory boards/committees and in what
proportion?
18) Are these advisory boards/committees standing or ad hoc?
19) Is the IRA subject to a regular external audit of its financial accounts?
20) If the IRA is subject to a regular audit of its financial accounts, by whom is it
audited?
21) Through whom can the decisions of the IRA be appealed or challenged?
22) Which body, other than a court, can overturn the decisions of the IRA where the
latter has exclusive competence?
23) What are the accepted grounds for appeal or challenge?
24) On what grounds can the chair and/or board members of the IRA be dismissed?
institutions, and with the exception of the BRSA, related non-governmental organizations. Before they take office, the board members of all IRAs except the TA have
to take an oath of office before the Supreme Court that they will carry out their
duties with utmost care and honesty and will not act against the provisions of law
during their terms in office.
Delegation and Accountability 351
The laws institutionizing all six IRAs recognize the chairs of the boards as the
actors who represent their agencies and are responsible for the organization, supervision, implementation, evaluation, and publicization of regulatory activities.
However, because they are regarded as a part of the administration, based on the
principle of integral unity of the administration provided by Article 123, paragraph
1 of the Turkish Constitution,25 the agencies and their boards that assume legal
personality are the formal accountees. In other words, the legal framework does not
recognize personal accountability for the decisions made by the IRAs or their
performance.
On the other hand, with respect to allegations of professional or administrative
misconduct, the chair, the board members, and the administrative personnel of the
IRAs in Turkey are treated as public employees and hence are bound by Law No.
4483, entitled “Law Regarding the Trial of Civil Servants and Other Public Employees” (Memurlar ve Diğer Kamu Görevlilerinin Yargılanması Hakkında Kanun).
Permission to open an investigation against the chair and the board members of the
IRAs is granted by the “affiliated” minister, while the consent of the chair is
required for investigations against the administrative personnel.
Reporting requirements are the most salient of the IRAs’ formal obligations vis-àvis the parliament and the government in Turkey. Law No. 4743, entitled “Law
Regarding the Restructuring of Debts to the Fiscal Sector and the Making of Amendments to Some Laws” (Mali Sektöre Olan Borçların Yeniden Yapılandırılması ve
Bazı Kanunlarda Değişiklik Yapılması Hakkında Kanun), which was adopted on
January 30, 2002, requires IRAs to inform the Planning and Budget Committee of the
Turkish Grand National Assembly of their regulatory activities once a year, but it
does not specify what information must be provided and in what form it should be
presented (e.g. written reports, briefings, oral presentations) to the parliamentary
committee. The requirement that they inform the parliament is explicitly stated in the
founding laws of only the CMB and the BRSA. The founding law of the BRSA also
includes a provision regarding its obligation to submit an annual report of activities
consisting of an analysis of their social and economic effects, as well as financial
accounts to the parliament.
By the aforementioned law, all IRAs in Turkey are also obligated to submit
annual reports of their activities to the Council of Ministers by the end of May.
Again, the law does not stipulate the required contents of these reports. Aside from
this umbrella provision, the reporting requirements included in the founding laws of
these IRAs vary. For instance, the law institutionalizing the CA obliges the agency
to publish annual reports, including its activities as well as the condition and developments in its area, but does not state the contents and the addressees of these
reports. On the other hand, the CMB, BRSA, and EMRA are required by their
founding laws to submit annual reports together with their financial accounts to their
“affiliated” ministries. The CMB also has to present analyses when asked by the
“affiliated” minister.
Mechanisms of accountability limited to reporting to the parliament and the
government remain insufficient to meet higher standards of transparency. Maybe
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most significantly, as public institutions IRAs are bound by the provisions of Law
No. 4982, entitled “Right to Obtain Information Law” (Bilgi Edinme Hakkı
Kanunu), which was published in the Official Gazette on October 9, 2003. This law
sets the principles and general procedures concerning the persons’ exercise of the
right to obtain information in accordance with the principles of equality, impartiality, and opennes as requirements of democratic and transparent governance. The
right excludes the disclosure of commercial secrets, civilian and military intelligence in addition to information and documents, the disclosure of which may
damage the economic interests of the country, create unfair competition, hamper fair
adjudication of cases under judicial review, or violate individuals’ privacy rights.
Moreover, institutions subject to this law are not obligated to respond to requests for
information or documents, the presentation of which would require extra work,
research, inquiry, or analysis. Requests for recommendations and opinions are also
outside the scope of this law. Despite all these limitations and safeguards, this law
introduces a mechanism of transparency, the significance of which should not be
underestimated.
Even though the importance of informing the public is at least mentioned in passing in the founding laws of almost all the IRAs in Turkey, there is no consistency in
the specification of requirements of transparency included in these laws. That of the
TA is the least specific in its provisions. Its founding law includes neither any
explicit provisions regarding transparency requirements nor an obligation to publish
its decisions or publicize regular reports of its activities. Similarly, the EMRA does
not legally have to publish its decisions, but its founding law requires providing
information on the details of grants from international institutions to the public and
holds the chair of its board responsible for informing the public about its activities
without stipulating how.
On the other hand, the laws institutionalizing the CMB, the BRSA, the CA, and
the PPA have stricter requirements of transparency. First of all, their founding laws
are highly specific in depicting their decision-making procedures, contents of decisions, reasons for decisions, and time periods during which decisions will be
reached, announced, and appealed, as well as fees and penalties. Moreover, the CA
is obliged to publish its final decisions, notifications, and bylaws. So is the CMB,
which like the BRSA issues weekly bulletins, including decisions that interest the
public. The PPA, on the other hand, is required to publish the Public Procurement
Bulletin in both printed form and over the internet. However, for all these means of
communication to the stakeholders and the public there are no plain language
requirements.
In addition to public disclosure of information regarding the activities of IRAs,
the representation and participation of the stakeholders in decision-making are also
regarded as channels by which the accountability of IRAs can be enhanced. The
board members of IRAs in Turkey are chosen among candidates proposed by
“affiliated” ministries, public institutions, and with the exception of the BRSA,
representative organizations of interested parties. On behalf of non-governmental
actors, the following groups each have one appointed representative on the boards
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Delegation and Accountability 353
of the stated IRAs: the Union of Chambers and Commodity Exchanges of Turkey
(TOBB) in the CMB, CA, PPA, and TA; the Association of Capital Market Intermediary Institutions of Turkey in the CMB; the telecommunications sector in the TA;
the Interuniversity Council in the CA; and the Confederation of Turkish Employer
Unions in the PPA.
Despite the inclusion of vague references to the fact that they may and/or should
seek the opinions of interested parties in the laws or bylaws of some agencies, the
IRAs in Turkey are not under any formal obligations to consult advisory boards/
committees composed of the representatives of the stakeholders and/or independent
experts before decisions or actions are taken. For instance, the law establishing the
TA includes a provision asserting that the agency may take measures to make the
expression of opinions by interested parties possible but does not stipulate what
those measures may or should be. If they deem it necessary, the IRAs’ “affiliated”
ministries may set up ad hoc advisory committees, but the only standing advisory
bodies that are established are those within the organizational hiearachies of the
agencies.26
Regarding financial accountability, the laws establishing the IRAs under analysis
introduced different mechanisms27 that were harmonized in 2003 by the adoption of
Law No. 5018, entitled “Public Fiscal Management and Control Law” (Kamu Mali
Yönetimi ve Kontrol Kanunu), aiming to enhance effective, economical, and efficient use of public resources, accountability, and financial transparency. The law
provides that the IRAs submit strategic plans and performance objectives together
with their budgets and renders them financially accountable to the Court of
Accounts.28 Financial oversight by the court, which is legally obligated to submit its
regular reports to the Planning and Budget Committee of the parliament, is to take
into account whether the financial resources of the agencies are used in accordance
with their institutional plans, objectives, and targets. Although the emphasis is on
financial accountability, the aforementioned law provides a mechanism by which
the IRAs can be held accountable for their activities and outcomes.
In Turkey, the authority to overturn the decisions of economic sector IRAs is
formally granted only to judicial bodies. While the judicial oversight of the CMB,
the TA, and the PPA is carried out by (regional) administrative courts, the CA, the
BRSA, and the EMRA are overseen by the Council of State.29 In the laws instituting
these IRAs, the accepted grounds for appeal or challenge are not precisely specified,
leaving them open to interpretation. Nevertheless, as the designated judicial bodies
are administrative courts, the oversight they provide is likely to involve primarily
that for errors of law and failure to follow due process so as to ensure procedural
accountability. As an effort to facilitate the development of expertise and specialization regarding IRA matters, the Thirteenth Department (Onüçüncü Daire), which is
exclusively responsible for the appeals against IRA decisions, was set up within the
Council of State in 2004.
Last but certainly not the least, although they do not constitute means of appeal,
there are some instruments of punishment and reward at the disposal of the parliament and the government. Undoubtedly, the parliament always has the authority to
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G. Sosay
introduce amendments in legislation by which powers are delegated to the IRAs.
The Council of Ministers, on the other hand, has the authority to appoint and reappoint the chair and the board members of the IRAs in Turkey. Reappointment may
be regarded as a reward for their performance in office.30 Yet dismissal may hardly
be used as a punishment for failures related to regulatory activities, as the chair and
board members cannot be dismissed unless they lose the qualifications required for
the job or violate laws.
In summary, how and to what extent does the legal framework set up for the six
economic sector IRAs in Turkey ensure their accountability? First of all, it can be
concluded that mechanisms of “upwards accountability” of economic sector IRAs in
Turkey to the legislature, executive, and the judiciary are more firmly established in
the legal framework than those of “downwards” and “horizontal” accountability.
There are formally established mechanisms of “downwards” accountability, such as
the requirements of transparency and representation of some interested groups on
the boards of five of the six IRAs. Yet, short of plain language requirements, legally
binding obligations to consult all interested and affected parties, and rigorous feedback mechanisms, these mechanisms may remain insufficient to ensure effective
democratic accountability to the general public, consumers, their representative
organizations, interest groups, and the regulated companies. On the other hand,
aside from the law organizing the BRSA, which includes the auditing of its finances
by an independent auditing firm as an optional clause, mechanisms of “horizontal”
accountability to broadly parallel instiutions outside the state structure are not
formally incorporated to the regulatory regimes in Turkey.
Regarding “upwards accountability” to democratically elected bodies, reporting
requirements to the Planning and Budget Committee of the parliament and to the
Council of Ministers comprise the primary means of legislative and executive oversight of the economic sector IRAs in Turkey. However, aside from the Public Fiscal
Management and Control Law, the legal framework (including the laws instituting
the IRAs, except that of the BRSA and the Law No. 4743) does not standardize the
contents of the reports and the ways in which the the parliamentary committee and
the government can call on the IRAs to account for these reports. Therefore, what
legislative and executive oversight is provided and how comprehensive and effective it is depends more on actual practice (informal accountability) than on what is
formally required by law.
The third branch of the government, the judiciary, in addition to overseeing
administrative accountability applying to the individual regulators and administrative staff of the IRAs as public employees, is granted other crucial roles in the
mechanisms of formal accountability established for the IRAs included in this study.
Regional administrative courts (for the CMB, the TA, and the PPA) and the Council
of State (for the CA, the BRSA, and the EMRA) are the courts of appeal to challenge
and overturn the decisions of IRAs. The laws instituting the agencies do not
precisely identify the accepted grounds for appeal and hence, whether the appeals
are accepted and on what grounds the cases adjudicated are open to judicial interpretation and discretion. Furthermore, the Public Fiscal Management and Control Law
Delegation and Accountability 355
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of 2003 made all six IRAs financially accountable to the Court of Accounts, the
oversight by which would also include that of outputs of IRA activities. The legal
requirement that the court’s reports of financial accounts and activities be submitted
to the Planning and Budget Committee of the parliament constitutes an additional
means of democratic accountability based on independent reviews of the court.
Although the legal framework determines the binding requirements of accountability and provides significant formal safeguards in regulatory regimes, a more
accurate assessment of the accountability of IRAs in Turkey (and elsewhere) calls
for a study of how and to what extent accountability is ensured in actual practice.
Based on empirical evidence obtained from surveys of IRA websites, documents,
and publications and semi-structured face-to-face interviews, the next section
addresses these questions.
Informal (de Facto) Accountability of Independent Regulatory Agencies
in Turkey
For all three dimensions of accountability (i.e. upwards, horizontal, and downwards)
transparency is a fundamental requirement. In general, as confirmed by an interviewed scholar and close observer of the Turkish IRAs, their efforts and activities
aiming to enhance transparency are more systematic than those of traditional bureaucracies in Turkey. Surveys of the websites and publications of the six economic
sector IRAs reveal that they fulfill their de jure requirements of transparency. Information about their powers, missions, objectives, functions, institutional structures,
decision-making procedures, activities, decisions, relevant statistics, and regular
bulletins as well as annual reports are readily accessible at their websites. More
specifically, for instance, the TA announces its annual work plans and calendars, the
BRSA publicizes its strategic plans, and the CMB puts out its draft communiqués on
its website and opens them to objections and suggestions from the stakeholders. In
sum, all economic sector IRAs publicize more comprehensive and detailed information than specified by law and, thus, it can be concluded that de facto transparency of
these agencies goes beyond their statutory transparency requirements. Nevertheless,
the variation in their statutory transparency requirements inevitably affects the specificity, especially of the decisions, publicized. While the CA is obligated to and does
publish its decisions with statements of reasons, the other IRAs are not and do not. A
board member of the TA explained this by the privacy and secrecy of information
regarding private companies.
In addition to unilateral dissemination of information via the internet and publications, the IRAs concerned have set up “information acquisition units” after the adoption of the Right to Obtain Information Law. Requests for additional information can
be made either directly from their websites or through the contact telephones, faxes,
email, and postal addresses provided on their websites. Through these channels it is
also possible to communicate complaints, opinions, and suggestions.
Despite the availability of the aforementioned means of transparency and feedback,
there are certain limitations regarding their ability to provide effective mechanisms
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G. Sosay
of “downwards” accountability. One limitation is related to the technical and legal
nature of regulatory procedures and decisions. In the absence of plain language
requirements, data and documents publicized by the IRAs are not “assessable”
enough by those who do not have the specialized knowledge needed to able to fully
comprehend and evaluate the information provided. Even though transparency was
emphasized as having utmost importance by the interviewed board members of the
IRAs, the aforementioned limitation, which has significant implications for
democratic accountability, has not yet been adequately tackled.
Moreover, in Turkey, where there is a digital gap and the general education level
is not very high, the majority of citizens rely on the media, rather than the IRA
websites and publications, as the main source of information about the IRAs, their
activities and decisions. As the media has a rather selective attention, the IRAs get
coverage mostly when they deal with controversial issues involving well-known
public and/or private actors, such as those involved in privatizations or corporate
(e.g. banking) scandals, when IRAs’ independently made decisions generate
political or bureaucratic opposition, or when their independence by itself becomes
controversial. As asserted by the president of one of the economic sector Turkish
IRAs who was interviewed, those who control the Turkish media have their own
economic interests that are often connected with the regulated sectors and firms.
Characterizing the Turkish media as being “oligarchic,” the same interviewee also
complained that most of the media coverage of IRA-related issues was not
impartial. In brief, the Turkish media falls short of providing complete and unbiased
information to the public about the IRAs and sometimes may do more harm than
good to their ability to perform their legally mandated activities.
Despite the diffulties involved in the dissemination of complete and accurate
information to the public, a significant number of those interviewed at the IRAs
reported that their agencies received many requests for information and complaints.
However, the reported observations of the interviewees regarding this varied. While
a board member of the TA claimed that there was an active and informed public in
the telecommunications sector, those interviewed at the CA found not only the
public but also the consumer organizations to be rather inactive and uninformed.
The variance in their observations can be linked to what their agencies do. A board
member of the CA stated that since the CA decisions generally did not directly and
immediately affect the ordinary citizens there was not much public monitoring and
control. The fact that the public does not sufficiently hold the IRAs to account was
one complaint voiced by the same respondent as well as by some of the scholarobservers who were interviewed.
The responses received from almost all the interviewees are evidence that as the
monitoring and control of the IRAs by the public, consumers, and their representative organizations in Turkey are poor and selective at best, the regulated sectors,
firms, and their representative organizations are more closely monitoring and
actively utilizing the feedback channels provided to them. As mentioned above,
there are board members who are nominated by the representative organizations of
the private sector in five out of the six economic sector IRAs. Furthermore, the
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Delegation and Accountability 357
IRAs, especially the BRSA, CMB, TA, and EMRA call on the private sector to
express their views and recommendations on the IRAs’ regulatory arrangements
before they are formalized. The BRSA and the CMB have offices in Istanbul where
Turkey’s private sector is heavily concentrated and stock exchange is located. The
board members and chairs of these agencies regularly attend meetings in Istanbul
with the representatives of the private sector. In addition to these means of access,
the regulated sectors and firms are also the ones that more effectively utilize the
channels of access that are also provided to the general public. A board member of
the CA underlined that most of the complaints they received through these channels
were from the regulated sectors and firms.
As presented in the previous section, regular reporting requirements to the
Planning and Budget Committee of the Turkish Grand National Assembly and to the
Council of Ministers constitute the main means of democratic “upwards” accountability of the economic sector IRAs in Turkey. An analysis of these reports demonstrates some variation across those of the IRAs concerned. Although all reports
include sections on general and specific objectives, organizational structures, annual
financial accounts, and activities performed, those of the BRSA and the CA are, in
some respects, more specific and analytical. Most importantly, the reports prepared
by both agencies prioritize their objectives and present an evaluation of their institutional strengths and weaknesses, while the most recently publicized report of the
BRSA also includes an impact analysis of the secondary arrangements introduced
by the agency. In sum, despite some variation in their contents, annual reports of all
six agencies provide considerable information regarding their activities for which
they can be held accountable. However, there has been consensus among those
interviewed that legislative and executive oversight of IRA activities mostly
remains limited to finances. The respondents stated that the inquiries that the IRAs
received from elected politicians were generally about the spending of these agencies and there was not much monitoring and control of the quality of regulatory
outputs and ex post facto performance of the IRAs. In addition to the fact that such
control necessitates specialized knowledge and expertise, which only a few, if any,
elected politicians possess, the fact that the the Planning and Budget Committee—to
which the IRAs report—by nature focuses on financial matters, and that the annual
reports of the IRAs are submitted together with that of the ministry with which they
are “affiliated” and hence cannot receive the special attention required, were underlined by several respondents as factors limiting the ability of the legislature and the
executive branch to provide oversight for IRA activities and outputs.
Besides annual reporting requirements to the parliament and the Council of
Ministers, appointments and reappointments of board members and chairs of the
IRAs can provide a mechanism for enhancing democratic accountability. Yet in
Turkey the effectiveness of this mechanism is limited by that fact that the nomination and appointment processes of board members of the IRAs are not sufficiently
transparent and open to public scrunity. Not much information about the candidates
is publicized ahead of time so as to allow time for the assessment of their qualifications and aptness for the positions to which they are appointed. Aside from being an
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G. Sosay
issue of formal necessity this has practical consequences that may influence the
operation and performance of the IRAs. Some appointed board members not
possessing the knowledge and expertise needed in the areas to which they are
appointed to regulate was stressed as a problem by the interviewed expert staff of
the IRAs as well as by the independent scholars and observers of these agencies.
In Turkey’s regulatory regimes the judiciary is granted authority to ensure administrative accountability, to overturn IRA decisions without specifying the grounds
on which appeals can be made, and to control the finances of the IRAs. The judicial
processes of administrative accountability that apply to IRA board members and
personnel are the same as those that apply to all public employees who are either
brought to court or penalized through internal disciplinary action for administrative
misconduct.
The appeals for IRA decisions are concentrated in the Council of State, which is
specified as the first court of appeals by the laws of the CA, BRSA, and EMRA and
regional administrative courts. As also reported by those interviewed, the oversight
of these bodies focuses on the due process. This means that they mainly provide a
judicial mechanism for procedural, rather than substantive, accountability. The
judges’ inadequate expertise and understanding of the economic rationale of IRA
decisions were emphasized by almost all respondents. Acknowledging this problem,
some IRAs, such as the CA and the CMB, organized seminars for the judges in order
to spread knowledge about the IRAs, their objectives and activities. The interviewees’ views regarding the responsiveness and willingness of the judges to learn
varied. While the respondents at the CA, which itself acts as a court and, hence, experiences more difficulties in its relations with the Council of State,31 perceived the
judges to be unwilling to be “educated”; others, such as a board member of the CMB
and an Ankara-based scholar of administrative law, who also acted as an advisor to
an economic sector IRA in the past, reported that the judges were eager to learn and
enhance their specialization and expertise in IRA matters. On the other hand, the
establishment of the specialized department within the Council of State was regarded
by all respondents as a positive development that can enable the judges to go beyond
evaluation of cases based solely on procedural grounds. A former board member of
the PPA who had been the Council of State nominee also reported the emerging division of labor among the Council of State judges, where each deals with the cases
against the same IRA. Despite these positively perceived changes, the work overload
of the Council of State has been mentioned as a significant problem slowing down
the judicial oversight process.
Although not specified by the laws institutionalizing the IRAs, some decisions of
the Turkish economic sector IRAs have also been appealed at the courts of
commerce and the Supreme Court. For instance, there have been cases against the
TA and the CA that traveled through the labyrinth of the Turkish judicial system,
making stops at the regional administrative courts, the Council of State, the Courts
of Commerce, and the Supreme Court. In some of these cases, the Supreme Court
ruled that the matters concerned were those of administrative law and should be
resolved by the Council of State or regional administrative courts.
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Delegation and Accountability 359
The slowness of judicial process that creates uncertainty on the part of the IRAs is
not limited to those related to the appeals to IRA decisions. The same difficulty was
also underlined by a few respondents as a problem regarding the Court of Accounts
responsible for judicial oversight of IRA finances. It was noted that it took the Court
of Accounts two to three years to write its report and four to five years to finalize its
decision. From the perspective of the IRAs, another reported difficulty in the
process of financial oversight by the Court of Accounts was that the court inspected
the IRAs as traditional ministerial bureaucracies or local administrations, not as
independent agencies established by special laws. The court’s inadequate understanding of the IRA missions, objectives, and the practical ways by which they can
be accomplished was mentioned as a factor that imposed unsound financial restrictions on the IRAs and constrained their ability to use their self-generated revenues in
performing their legally mandated functions. Moreover, some respondents
complained that additional practical constraints on the ability of the economic sector
IRAs to spend were instituted by decrees in force of law and circulars of the Prime
Ministry.
In relation to judicial oversight, another observation that should be underlined is
that, despite not being specifically on appeals against IRA decisions, the Constitutional Court and the Supreme Court in the past have made some rulings with a view
of the public interest in the regulated sectors. For instance, one of the academics
interviewed gave the example of the Constitutional Court rulings regarding privatizations as decisions taken based on an accurate assessment of the public interest. The
decision of the Supreme Court regarding the locations of cellular phone base stations
was viewed, by another respondent, as still another ruling made in the public interest.
Such oversight grounded on a notion of the public interest, which, according to the
independent observers of the IRAs who were interviewed, is missing in the Turkish
IRAs, comprises a mechanism to ensure that as they conduct their day-to-day busines
to fulfill their formally specified objectives the IRAs do not lose sight of a wellfounded understanding of the “public interest.”
Finally, as is documented by a report prepared by the OECD in 2002, securing
effective oversight of IRAs for output and performance is a challenge even in the
economically more advanced OECD countries that have more experience with IRAs
than Turkey.32 In addition to the difficulties and limitations presented above, weakness of mechanisms of “horizontal” accountability to broadly parallel independent
institutions with the specialized knowledge essential to providing independent
expert evaluations of IRA performance makes this a bigger challenge in Turkey.
While the Turkish government’s issue of a circular, in April 2007, on the implementation of Regulatory Impact Assessment (RIA), developed by the OECD as a tool to
improve regulatory quality,33 can be viewed as an acknowledgment of the need to
evaluate IRA performance, the question of how accountability for the findings of
RIA and other measurements of IRA performance can be effectively achieved
within the framework of national regulatory regimes has not been satisfactorily
resolved. In this respect, monitoring and regular reporting of the performance of
economic sector IRAs in Turkey by international institutions—such as the OECD,
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G. Sosay
the IMF, the World Bank, and the EU, which have various means of influence, such
as conditionality, on domestic policies and institutions—may constitute an informal
external mechanism of accountability.
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Conclusion
IRAs are delegated authority in order to isolate them from political influences and
pressures that are viewed as diminishing the efficiency and efficacy of public institutions in the conventional chain of accountability in parliamentary democracies. The
prescribed solution to the problem of accountability deficit such delegation generates
is to replace centralized and hierarchical ministerial control with a complex network
of “horizontal,” “downwards,” and “upwards” mechanisms by which IRAs can be
effectively held accountable. This article has presented an analysis of how and to
what extent this has been achieved by law and in practice in the cases of the six
economic sector IRAs in Turkey.
While the Turkish IRAs’ “upwards” accountability to the three branches of the
government is firmly grounded in the legal framework, evidence regarding the informal accountability of the IRAs included in this study raises some concerns about the
oversight provided by legislative, executive, and judicial authorities in practice. First,
as they provide strict controls, which some see as necessary, over the finances of the
IRAs, the existing mechanisms of financial accountability erode the financial autonomy and, hence, independence of these agencies. Moreover, when financial oversight
is carried out by those who treat the IRAs as if they were traditional ministerial
bureaucracies or local administrations, it can constrain the ability of the Turkish IRAs
to accomplish their legally mandated objectives. Secondly, despite implementing the
mechanisms of financial oversight rather rigorously, the elected politicians do not
sufficiently utilize the other means (e.g. making the processes of nomination and
appointment of IRA board members and chairs transparent, improving monitoring of
IRA activities and outputs beyond fiscal considerations and without undermining the
independence of the agencies, and inviting IRA authorities to appear before the
parliament to consult, explain, and give reasons for their activities) by which they can
augment the democratic accountability of the IRAs in Turkey. Thirdly, regarding the
judicial oversight of the IRAs, the need to further increase the specialized knowledge
and expertise of the judges and the slowness of the judicial process are the two major
challenges that should be addressed.
Lastly, the mechanisms of “downwards” and “horizontal” accountability established for the six economic sector IRAs in Turkey have serious shortcomings.
Although de facto transparency of the agencies examined surpasses their statutory
transparency requirements, they are not sufficiently and effectively held to account
for the information and analyses they publicize by the general public, consumers,
and their representative organizations. On the other hand, there is closer monitoring
by the regulated firms, sectors, and their representative organizations who, addition
to having appointed representatives on the boards of five of the six economic sector
IRAs, are in regular interaction with these agencies. Although mechanisms of
Delegation and Accountability 361
accountability to the regulated sectors are necessary components of accountability
regimes prescribed for the IRAs, the fact that in practice they are not equally
matched by monitoring and control by the other non-state stakeholders creates the
risk of a bias in favor the regulated sectors. The risk is exacerbated by the weakness
of mechanisms of “horizontal” accountability to institutions that can provide independent and impartial monitoring, scrunity, and formal review of IRA activities,
outputs, and performance.
Acknowledgements
Research for this study was supported by Boğaziçi University, Research Fund,
Project No. 06C301, carried out with E. Ünal Zenginobuz.
g[bevre]
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Notes
1.
2.
3.
4.
5.
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.
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.
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.
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.
Kaare Strøm, “Delegation and Accountability in Parliamentary Democracies,” European Journal of
Political Research, Vol. 37 (2000), pp. 261–70.
362
6.
7.
G. Sosay
Terry Moe, “Interests, Institutions, and Positive Theory: The Politics of the NLBR,” Studies in
American Political Development, Vol. 2 (1987), p. 236–99.
See Gül Sosay and Ünal Zenginobuz, “Independent Regulatory Agencies in Emerging Economies,”
Boğaziçi University, Research Papers, ISS/EC 2005-10.
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.
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.
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.
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.
Colin Scott, “Accountability in Regulatory State,” Journal of Law and Society, Vol. 27, No. 1
(2000), pp. 38–60
House of Lords , The Regulatory State: Ensuring Its Accountability, 6th Report, Select Committee on
Constitution (2004), available at: www.publications.parliament.uk/pa/Id200304/Idselect/Idconst/68/
6803.htm
Scott, “Accountability in Regulatory State.”
Giandomenico Majone, “Independence vs Accountability? Non-Majoritarian Institutions and Democratic Government in Europe,” European University Institute, Working Papers No 94/3 (1994).
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.
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.
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.
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).
Lodge, “Accountability and Transparency in Regulation,” p. 127.
Hupkes, Quintyn and Taylor, “The Accountability of Financial Sector Supervisors,”, p. 1591.
Ibid., p. 1581.
Priest, “An Accountability Framework for Regulatory Agencies and Tribunals,” p. 19.
OECD, Designing Independent and Accountable Regulatory Authorities For High Quality Regulation, Proceedings of an Expert Meeting in London, January 10–11, 2005.
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
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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.
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.
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.
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.
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.
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.
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.
OECD, Regulatory Policies in OECD Countries: From Interventionalism to Regulatory Governance
(Paris: OECD, 2002).
OECD, Regulatory Impact Analyses: Best Practices in OECD Countries (Paris: OECD, 1997).