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POLS 2250 (89)
Chapter 7

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University of Guelph
Political Science
POLS 2250
Nanita Mohan

Chapter 7 - Definition of a Regulatory Agency “A statutory body charged with responsibility to administer, fix, establish, control, or regulate an economic, cultural, environmental, or social activity by regularized and established means in the public interest and in accordance with general policy guidelines specified by the government. This body is under the general direction of the legislature and a responsible minister with regard to policy matters but possesses relative autonomy of action in making individual decisions within those policy guidelines.” • They come in so many different sizes and shapes with a variety of duties that it is difficult to generalize them • regularized and established means in the public interest • The underlined statements above separate regulatory agencies from operating departments and Crown corporations • Insulated from direct political intervention when it is making decisions in specific cases (some control over direct policy direction) • Operate on social and economic regulations Social Regulation: aimed at restricting behaviors that directly threaten public health, safety, welfare, or well-being. These include environmental pollution, unsafe working environments, unhealthy living conditions, and social exclusion. Economic Regulation: aimed at ensuring competitive markets for goods and services and at avoiding consumer and other harms when such markets are no feasible. This is accomplished thorough regulating prices and/or conditions for firms entering specific markets. Major Federal Regulatory Agencies (Table 7.1) Economic Regulation • Canadian International Trade Tribunal • Canadian Transportation Agency • National Energy Board • Standards council of Canada • Transportation Safety Board of Canada Social Regulation • Canadian Environmental Assessment Agency • Canadian Food Inspection Agency • Canadian Human Rights Commission • Canadian Radio-television and Telecommunications Commission • Indian Claims Commission Functions of Regulatory Agencies “...established to carry out administrative, quasi-judicial, regulatory and advisory functions within an established policy and legislative framework, however these functions are by no means mutually exclusive and many agencies carry out multiple roles.” • Adjudicative (the adjudication process is the consideration of individual cases) • Legislative • Research • Advisory • Administrative Organizational Structure • Almost always headed by a panel of members (usually 5-10 full time members) • One member is designated as chairperson or president, and is considered the administrative head of the agency • Panel members are appointed by cabinet for specified terms Rationale for Regulatory Agencies • Sometimes the market falls short of expectations because of market failures • The attempt to fix market failures is often considered the most important rationale for independent regulatory agencies Monopoly • One kind of market failure • the lowest cost for a good is obtained when there is only one product Control Externalities or “Spillovers” • Externalities refer to the spill-over effects on a third person or entity created by two agencies in a transaction Information • For markets to allocate resources efficiently, they need consumers to have the information necessary to make a good decision Smooth Market Instability • “Supply management” • Agencies work by setting quotas on the overall quantity of the product that can be produced and allocating this quota among specific producers. This
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