Daily Times

The better governance of the country is inextricably linked to the prevalence of an improved regulatory framework. As the old wisdom goes that absolute power corrupts absolutely. Similarly, a well-functioning regulatory framework ensures the separation of powers. We look at regulatory framework issues in this article by referring to some literature (mainly Sherani 2017; but also the Planning Commission’s document “Institutional Reforms and Governance” nd; World Bank 2013; and Burki 2008).

At the de jure level, most of the regulatory bodies in the country established through the parliamentary legislation were meant to perform independent of the line ministries and other governmental agencies. However, at the de facto level, the independence of these regulatory institutions is restricted through numerous ways. One such measure was to put these regulatory bodies under de facto Cabinet Division’s control as they needed to seek substantial ‘input’ from the central government to hire their senior management and in the management of financial matters. Such ways to control the regulatory bodies undermines their independence and does not bode well for the spirit behind the establishment of a regulatory framework in the country.

Coming back to the regulatory framework, there are quite a few semi-autonomous/independent regulatory bodies in the country established over a long period of time and they includes central institutions such as the State Bank of Pakistan and the Securities and Exchange Commission of Pakistan (that replaced the previous Corporate Law Authority), amongst others.

Only the government has the right to announce (downwards or upwards) adjustment in power tariffs and it can do so to any level up to the NEPRA recommendation. One regulatory authority that works relatively more independently than others since 1997 is the State Bank of Pakistan, and it needs to be welcomed

After the liberalization and deregulation initiated in certain economic sectors since the 1990s, more regulatory bodies were set up in additional sectors such as the telecommunication and power generation and these include the National Electric Power Regulatory Authority (NEPRA), the Public Procurement Regulatory Authority (PPRA), the Oil and Gas Regulatory Authority (OGRA), Frequency Allocation Board (FAB), and the Pakistan Telecommunication Authority (PTA).

Sherani (2017) defines “The main functions prescribed for these bodies include the overall economic regulation of the sector under their authority, the granting of licences, determining tariffs, rates, charges and conditions for operators and investors in the sector, develop uniform industry standards and codes of conduct, issue state of industry reports etc. The role of PPRA is different, given that it is responsible for prescribing regulations and procedures for public procurement by Federal Government owned public sector organizations, and for monitoring the same.”

As discussed earlier, at the de facto level, these regulatory bodies are not able to function in a truly independent way. They are administratively controlled by the same government ministries whose functions they are meant to regulate. It undermines the essential principle of the separation of powers and gradual efforts made since the late 1990s to establish an independent regulatory framework. It is a regression and a move towards concentration of powers rather than its separation. For example in power tariffs, the concerned regulator -NEPRA – is only permitted to determine the tariff but not allowed to notify it. Only the government has the right to announce (downwards or upwards) adjustment in power tariffs and it can do so to any level up to the NEPRA recommendation. One regulatory authority that works relatively more independently than others since 1997 is the State Bank of Pakistan, and it needs to be welcomed.

World Bank (2013) links better regulation of governance with prioritizing reforms in a number of institutions and they are not limited only to the National Accountability Bureau. There is a recommendation to link the accountability process with initiating reforms in ‘few priority institutions’ first such as the Auditor General of Pakistan, Offices of the Ombudsman, market governance institutions, and the Public Procurement Agencies. It also recommends that the due attention should be given to the Election Commission of Pakistan, as well as the Federal Public Service Commission, other than the power and gas regulators.

The above-cited Planning Commission document states, “Corporate governance will be improved to increase public-private interface, and by developing legal and regulatory frameworks. Public sector management needs to be made more efficient through a variety of measures, which includes modernisation of public sector institutions, civil service reforms (recruitment, training, promotion, transfer/ posting and performance evaluation); procedural and process reforms; procedural regulations and controls; tax and judicial reforms.”

Sherani (2017) in addition to the earlier mentioned institutions also includes the Economic Coordination Committee of the Cabinet (ECC), the Planning Commission, tax administration, and Pakistan Bureau of Statistics. The rationale behind this recommendation is to protect economic governance institutions from political pressure that governments often exert. It also discusses that the provincial government departments often lack the needed infrastructure, qualified staff, and resources to effectively carry out the administrative functions and deliver services after the devolution of power post 18thamendment and there is a need to work towards bringing an improvement in this regard.

A number of ideas and recommended ways have been discussed in the literature as discussed above to establish and strengthen the effective regulatory framework in the country. There is no dearth of ideas. What is really needed is the will of the government to respect the principle of separation of powers and work better to institutionalize it.

The writer is an Islamabad-based social scientist, visiting Lahore presently