Regulating Through the Back Door: Understanding the Implications of Institutional Transfer
Regulating Through the Back Door: Understanding the Implications of Institutional Transfer
This chapter explores ideas of regulatory diffusion and transplant. It argues that the existing literature, which focuses on channels of diffusion and macro-contextual variables of sectors and countries, insufficiently accounts for how the nature of institutional outcomes are shaped by the way regulatory agencies are adopted and embedded into national political economies. Using the case of Indian electricity regulation, it suggests that when adoption is driven more by the role of external actors rather than national policy choices, there is little scope for ex ante deliberation of the role regulatory agencies can and should play within national governance systems. Instead, the functioning of regulatory agencies are better explained by ex post adjustment, as agencies seek to accommodate existing political pressures, accompanied by efforts to explain and justify the foundational myth on which regulator adoption was based. Regulatory outcomes are then incompletely explained by macro-context and institutional form alone, but instead require understanding micro-details of local political and institutional arrangements. The chapter calls for attention to micro-politics and local specificities of the process through which regulatory agencies are embedded in national political contexts.
Keywords: regulatory diffusion, regulatory transplant, institutional outcomes, regulatory agencies, India, electricity regulation, micro-politics
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