Regulation as a remedy for political failure

Posted on May 7, 2013  /  0 Comments

At LIRNEasia we study and teach about regulation. In March-April we spent some effort seeking to contribute to what we saw as an effort to remedy some long-standing political failures through transparent, consultative processes set in motion by Sri Lanka’s Public Utilities Commission of Sri Lanka (PUCSL). Our recommendations were not accepted, but we still hope the remedy will itself survive political failure.

In the aftermath of the protests and the President’s overruling of the PUCSL, several observers have suggested that the PUCSL is a redundant entity that should be wound up. I agree that it failed in this instance and that it has done grievous harm to itself and to the essential process of moving toward cost-reflective tariffs. Its strategic illiteracy opened the door to formal entry of political power into the regulatory process and created the perception of irrelevance.

The full column at LBO.LK.

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