A panel at the recent ACER Week Conference in Victoria Falls discussed and give views on a question that is often neglected in discussions of competition law and policy: institutional design. The speakers came from a number of competition authorities and economic regulators from the Southern African region and played prominent – sometimes preeminent – roles in the operation of these bodies.
A key topic discussed was the effectiveness of having a dedicated adjudicative body separate from the competition authority and from the usual court system. Another was the competing models of unitary and multi-member authorities.
In some of the global research on this latter point, the arguments have been put as follows:
“The multimember board is believed to offer the advantages of diversified expertise, greater resistance to capture, and heightened legitimacy. Multi-member boards are also less subject to abrupt shifts in policy in the wake of an election that results in a change in power. A unitary hierarchy offers its own advantages. Compared to a board whose members may communicate disparate views about what their agency should do, a single executive is better able to create a clear “brand” and define a coherent program for her agency. A single executive is more likely to quickly reach a decision and implement it than a multi-member board. Finally, because decision-making is in the hands of a single individual, it less likely the slot will go to an unqualified political supporter”.1
Of course, the point is also made that there are many different variations on these models.
One aspect that was of interest was how the discussion moved quickly from institutional design to the topic of institutional independence. Independence is of course distinct from design, though there are a number of ways in which the two topics are relevant to each other. Indeed, one interesting line of comment at the panel looked at the degree to which a competition authority or an economic regulator could itself have an internal review function.2
With the topic of independence, the political temperature in the room rose (as perhaps did the attention levels of some delegates). Independence is usually thought of as a hot button issue and one that you either love or hate – just as an administrative body might either have independence or not. In this light, the remarks made (both by panelists and from the floor) related primarily to independence as the opposite of accepting influence from government. The authorities and regulators were independent and would not take direction from government.
Commissioner Tembinkosi Bonakele of the South African Competition Commission made the important point that while institutions can claim to be independent of political influence (from a legal or design perspective), the reality is that they are agencies of government and governments should rightfully take a keen and close interest in their work. In this case, the question would be how much interest by a government in a competition authority is too much? This is then generative of further opportunities to share experiences and learning across the various authorities and regulators in the Southern African region.
What might then be actions to take when the interest is too much or too little? This was an interesting line of investigation opened up by the conversation. Competition authorities of course do need to safeguard independence, but can also work with the government on a number of campaigns. Indeed, the one will usually work well with the other.
A PDF copy of this article can be found here.
- Kovacic, W. E. and Hyman, D. A. (2012). ‘Competition Agency Design: What’s on the Menu?’
- It seems that the answer is that it can, as is implied by the decision of the South African Constitutional Court in Islamic Unity Convention v Minister of Telecommunications and Others, Case No. (CCT 33/07)  ZACC 26; 2008 (3) SA 383 (CC); 2008 (4) BCLR 384 (CC) (7 December 2007). Note that this case and many others from the courts and from adjudicative authorities such as the Competition Tribunal are available at the free website SAFLII.