"The Regulatory State in Portugal: Evolution and Performance", a study by FFMS, coordinated by a lecturer from the Católica Porto Business School
"The Regulatory State in Portugal: Evolution and Performance", the new study by the Francisco Manuel dos Santos Foundation (FFMS), which analyses the independence of the regulatory bodies in Portugal and the impact of the creation of the Competition, Regulation and Supervision Court, was coordinated by Ana Lourenço, lecturer at the Católica Porto Business School (CPBS). The study, conducted under the scope of the Centre for Studies in Management and Applied Economics (CEGEA), also counted with the collaboration of a set of CPBS' teachers, namely: Ricardo Gonçalves and Vasco Rodrigues (authors); Filipa Mota, Mariana Cunha, Rafael Dias and Sandra Coelho (collaborators).
The study analyses the functioning, independence and politicisation of regulatory bodies in the performance of essential functions delegated by the State, namely the supervision of economic sectors such as energy and communications, and the guarantee of competition.
Has the approval of the Framework Law for Regulatory Authorities in 2013 effectively led to greater independence of Portuguese regulators? What assessment can you make of the creation of the Competition, Regulation and Supervision Court? Has its constitution led to an increase in the speed, efficiency and quality of justice? To answer these and other questions, the study assesses the independence of three regulatory bodies - the Energy Services Regulatory Authority (ERSE), the Competition Authority (PCA) and the National Communications Authority (ANACOM) - and then analyses the system of performance indicators established by each body.
The deepening of the regulatory state in Portugal seems to have been mainly triggered by external pressures, the study reveals, motivated by public sector reforms in other Western countries, by the obligations arising from membership of European institutions, and by the need to ensure credibility with international institutions such as the Troika. Although the Framework Law on Regulatory Authorities has established rules that contribute to greater regulatory independence, several restrictions on this independence remain, related to governance and the financial and organisational regime of the regulators. This Framework Law introduced changes that, however, did not go as far as was desirable in terms of protecting the independence of the entities, since it keeps powers that should fall to the Assembly of the Republic within the Government's sphere, allows the application of captivations and limits the performance of activities necessary for the exercise of sanctioning powers.
In the three regulatory bodies analysed in the study, reappointments and early departures, which may be signs of politicisation, are not frequent and there is, as a rule, no disparity between the appointment of politicians and non-party affiliates. ERSE is apparently the most politicised of the three entities, given that, since its foundation in 1995, half of the people appointed to the administration have had political experience, mostly in government positions. The Competition Authority is the entity which has suffered the greatest impact from the captivations, and it is also the one in which the politicisation of appointments is least evident.
The study shows that the regulatory bodies analysed monitor their activity using a wide range of indicators to measure it. Over time, there has been a tendency to increase the number and variety of indicators used, especially those focused on the results of the entities' activity. Examples of such indicators are those relating to the quality of service provided by regulated companies and the prices charged.
Regarding the Competition, Regulation and Supervision Court, created in 2011, the study concludes that it has contributed to increasing the speed of appeals against the decisions of regulatory bodies, but this has not been reflected in an increase in the speed of the courts to which these cases have been withdrawn. The data collected also points to an increase in the efficiency of justice, but it is not possible to conclude that there has been an increase in the efficiency of justice. In fact, the creation of a centralised national court has contributed to a justice system that is more distant from its citizens, leading to an increase in the overall costs - and an increase in inequality - of accessing justice.
The study also notes that the creation of this court has not contributed to a significant increase in the specialisation of judges and that the quality of justice could be improved by changing some existing rules regarding the selection of judges, expert advice and the appeal of decisions. In short, judicial reform is incomplete: decisions by regulators are still scrutinised by non-specialised tribunals, such as administrative courts, and there is no consistency in judicial appeals, as several regulators continue to allow appeals to the Supreme Court of Justice where, unlike in other countries, judges do not have a cadre of expert advisors.
These are the main conclusions of the study "The Regulatory State in Portugal: Evolution and Performance", according to which, in the last decade, the Regulatory State in Portugal has changed little and not always for the better, and it is difficult to unequivocally attribute this scarce change to the Framework Law of the Regulatory Authorities and to the new specialised court.
The presentation session of the study took place on 14 November. You can access the study and its presentation session here.
