Equipping Agile and Autonomous Regulators

Annex A. Methodology

This annex includes a further description of the methodology used for the OECD Survey on the Resourcing Arrangements of Economic Regulators. It discusses the survey structure, focus, data coverage and process and presents a list of definitions used for the survey.

Survey structure

The survey is structured into four sections (Figure A A.1). The first section identifies general information on the functions of the regulator and quantitative information on its staff and budget. The second section covers human resource arrangements of regulators, such as recruitment, salaries and career development. The third section focuses on financial resource arrangements, such as sources of funding, the regulatory budget and financial management. Finally, a fourth section includes questions specifically on resourcing arrangements of multisector regulators.

The survey benefitted immensely from extensive inputs from NER members during the discussion of a draft version at the 15th meeting of the NER in November 2020. The report incorporates feedback from delegates on the preliminary survey findings as presented at the 17th meeting of the NER in November 2021 and the draft report as presented at the 18^th meeting of the NER in April 2022.

Survey focus

The survey analyses the resourcing arrangements of economic regulators as of 1 January 2021. The analysis presents those arrangements that are in place as of this date, and does not consider any policy reforms, laws or regulations that were enacted after that date.

Where the survey analyses arrangements in place for staff, these arrangements concern managerial, technical and support staff, with the exception of members of the board and/or agency head. Arrangements specific to the board and/or agency head of regulatory authorities are outside the scope of the current survey.

The survey focuses on economic regulators within the OECD Network of Economic Regulators (NER) with a mandate in one or more of the following four sectors: energy, e-communications, transport and water. For the purpose of the survey, a regulator qualifies as a “single sector regulator” if it oversees only one of these four sectors, and qualifies as a “multisector regulator” if it oversees two or more out of the four sectors. A description of each sector, including relevant codes from the UN International Standard Industrial Classification of all economic activities (ISIC) is included in Table A A.1.

Figure A A.1. Survey structure

Source: 2021 OECD Survey on the Resourcing Arrangements of Economic Regulators.

Table A A.1. Sector descriptions

Sector	Sector description	Relevant UN ISIC codes
E-communications	This sector covers the provision of telecommunications and related services, i.e. the transmission of voice, data, text, sound and video on fixed and mobile networks.	Included in ISIC rev 4.0 491, 492, 50, 51, 5221, 5222 and 5223
Energy	This sector covers the provision of electric power, natural gas, steam, hot water and the like through a permanent infrastructure (network) of lines, mains and pipes.	Included in ISIC rev 4.0 35 and 493
Transport	This sector covers rail transport, air transport, water transport, road freight transport and transport by coach.	Included in ISIC rev 4.0 61
Water	This sector covers the collection, treatment, distribution and retail supply of water for domestic, agricultural and industrial purposes.	Included in ISIC rev 4.0 36, 37 and 493

Source: UN (2008), International Standard Industrial Classification of All Economic Activities (ISIC), Rev.4, https://unstats.un.org/unsd/publication/seriesm/seriesm_4rev4e.pdf.

Where applicable, multisector regulators have been asked to specify their human and financial resource arrangements for each sector individually, as arrangements can differ between different sectors depending on the set-up of the authority. In the presentation of the results per sector, multisector regulators are included as part of the average for each of the sectors they oversee.

Data coverage

The survey was distributed among delegates within the OECD Network of Economic Regulators. Fifty-seven national and subnational regulators responded to the survey. Responses cover 31 countries, out of which 27 OECD member countries and 4 non-members (Albania, Brazil, Peru and Romania).1 For 17 countries, more than one regulator completed the survey (Figure A A.2).

Figure A A.2. Fifty-seven regulators across 31 countries responded to the survey

Note: Survey respondents include subnational regulators in the case of Australia (Essential Services Commission of South Australia), Belgium (WaterRegulator for Flanders) and the United Kingdom (Water Industry Commission for Scotland).

Source: 2021 OECD Survey on the Resourcing Arrangements of Economic Regulators.

For the purpose of the survey, four sectors have been identified (energy, e-communications, transport and water). The survey response includes 42 regulators that oversee one of these four sectors, and 15 regulators that oversee two or more sectors (referred to in this report as “multisector” regulators). In total, the survey data provides a balanced number of responses across the four sectors (Figure A A.3).

Figure A A.3. The survey response contains a balanced mix of utility sectors

Note: Multisector regulators have been included for each of the sectors they oversee.

Source: 2021 OECD Survey on the Resourcing Arrangements of Economic Regulators.

A majority of regulators responding to the survey are independent regulatory bodies. Out of the 57 regulators that responded to the survey, 51 regulators (89%) have an independent legal status and six regulators (11%) are ministerial departments or agencies (Figure A A.4). This finding could reflect the characteristics of participants within the NER, and may differ for the wider population of economic regulators.

Figure A A.4. A majority of regulators responding to the survey are independent bodies

Note: Multisector regulators are included in the data for each of the sectors they oversee.

Source: 2021 OECD Survey on the Resourcing Arrangements of Economic Regulators.

Process

A first draft of the survey was discussed with a select group of regulators that participated in a pilot in October 2020. After incorporating comments, an improved draft was discussed at the 15th meeting of the NER on 17 November 2020. Discussions and feedback from NER members supported the development of the final version of the survey.

The finalised survey was distributed in January 2021 among all the regulators that are included in the contact list for the OECD Network of Economic Regulators. Respondents were asked to return the survey within six weeks. The NER Secretariat provided an update on the survey response and next steps at the 16th meeting of the NER on 13 April 2021.

Along with the survey distribution, the NER Secretariat provided a list of definitions and a document with instructions to support respondents in their survey response. Where applicable, additional notes and instructions were provided for specific questions within the survey, to clarify the type of information and specifics that were requested. Respondents were able to provide additional information on responses in a comments field that was included for each question.

The NER Secretariat validated survey responses between April and August 2021. During the data validation, the NER Secretariat assessed whether responses adhere to the multiple choice options provided, and are accurate, consistent and complete. Moreover, the data validation was used to ensure the interpretation of questions was consistent across regulators. Where possible, public sources were used to verify answers. Where public sources were unavailable, answers were assessed based on their plausibility and consistency, making use of additional information provided by regulators in the comments section. In case of doubts or potentially incorrect answers, the Secretariat followed up with regulators to obtain further information or clarification. For most regulators, two rounds of follow-up questions were conducted to verify the survey responses.

Following the validation of survey responses, the NER Secretariat analysed the data to identify trends across regulators and regulator-specific examples of challenges and good practices. Preliminary findings were discussed at the 17th meeting of the NER on 17 November 2021 and a draft report was discussed at the 18th meeting of the NER on 6 April 2022. Inputs from these discussions, as well as written comments received after the meeting, have been used in the development of the report.

Definitions

Table A A.2 includes a list of definitions used for the purpose of the current survey.

Table A A.2. Definitions used within the survey

Term	Definition
Budget appropriations	Budget appropriations refer to the authorisation, to permit the regulator to incur obligations, and to pay for them. It represents the prescribed limit on spending within a specified period.
Budget lines	Budget lines are the different classes of expenditure as identified in the regulator’s budget proposal.
Central government remuneration policy	Central government remuneration policy defines the general remuneration policy for central government employees, and defines categories and salary ranges for staff remuneration.
Civil servants	Civil servants are only those public employees employed under a specific public legal framework or other specific provisions.
Establishing legislation	The establishing legislation is the one that set up the regulator and defines its roles and functions.
External professionals	External professionals are professionals that are employed by a company or body outside the organisation and that are contracted to provide services for the organisation. External professionals can include among others consultants, as well as external IT and administrative support.
External qualifications	External qualifications can include academic qualifications such as master degrees and PhD’s and professional qualifications such as accounting and finance qualifications or external training courses.
Fees	Fees are any payments that are collected from regulated entities to fund the regulator’s operations.
Fixed-term contract	A fixed-term contract is a work contract with a specified end date, as opposed to open-term contracts, which do not have specified end dates.
Junior or middle level staff	Junior or middle level staff includes all managerial, technical and support staff, with the exception of senior management (the first two levels of management below the board or agency head) and the members of the board and/or agency head.
National budget	The national budget defines the financial plans of the central government. The budget is the main economic policy document, demonstrating how it plans to use the public resources at the government's disposal to meet policy goals.
Other public employees	Other public employees are people working in the public sector, who are not hired under a specific public legal framework. Often, these employees are hired under labour law as private sector employees, however specific collective labour agreements may exist.
Performance-related remuneration system	A performance-related remuneration system refers to any system in which the salary of staff is linked to their performance.
Post-employment restriction regarding employment	A post-employment restriction regarding employment restricts the employee after the end of employment at the organisation in accepting any job that may cause a conflict of interest given the information he/she may have acquired during the employment, usually for a certain period (“cooling-off period”).
Relevant budget authority	The relevant budget authority is the ministry of finance and/or any other department or ministry in charge of preparing and monitoring the national budget.
Senior management	Senior management includes the first two levels of management below the board or agency head, and excludes the members of the board and/or agency head.
Spending caps	Spending caps are considered to be limits on the regulator’s spending on certain types of expenditures.
Staff	Staff includes all managerial, technical and support staff, and does not include members of the board and/or agency head.
Stakeholders	Stakeholders refer to actors outside government, including regulated industry, consumers and the general public.
Support staff	Support staff includes staff members that provide support services for the operation of the organisation, such as administration or IT services, but which do not directly execute any regulatory or supervisory activities themselves.
Technical departments	Technical departments include those departments involved in regulatory and supervisory activities, as opposed to departments that provide administrative services.
Unspent budget	Unspent budget is the difference between the total approved budget and the total actual expenses.

Note: The definitions have been designed for the purpose of the current survey, and do not define any official OECD definitions outside the context of the survey.

Source: 2021 OECD Survey on the Resourcing Arrangements of Economic Regulators.

Note

← 1.  Since the survey took place in early 2021, the OECD has opened accession discussions with six countries on 25 January 2022, including Brazil, Peru and Romania. Brazil is currently an OECD Key Partner.