Measuring Regulators' Statutory Independence

Given past and continued liberalization of the economy, interest has grown in politicians’ efforts to re-regulate previously liberalized sectors through creation independent regulatory agencies (IRAs). One key theoretical interest is the degree of independence of these IRAs. In this article, we define what we understand by independence, and in particular statutory independence from politics. We argue that existing attempts to operationalize the statutory independence of IRAs from politics suffer from a number of conceptual and methodological flaws. Using new data gathered from 194 IRAs worldwide, we test these arguments by modelling the statutory independence of IRAs as a latent trait. Our arguments are borne out insofar as a number of index items we had criticised turn out to perform poorly in the model. We close by giving recommendations for researchers working on the statutory independence of regulatory agencies