The oil factor: Regulatory agency creation in the MENA region

Abstract

The regulatory governance literature has shown a rising interest in the development of the regulatory agencies in developing countries. We now have a relatively good number of studies on Latin America and Asia. However, there is, to date, very scarce knowledge about regulatory governance in the Middle East and Northern Africa (MENA countries), where regulatory agencies diffused less systematically and more slowly. This paper makes a first step towards filling this gap and, in doing so, it raises a general question about the role of oil and gas revenues in restraining the propensity for agency creation by national states. Making use of a cross-sectoral database about the creation of regulatory agencies in MENA countries, we discuss the relevance of states’ oil and gas revenue to explain their lower levels of agencification compared to other regions. A case study focused on electricity regulation in Algeria is also included for this purpose. We place several hypotheses considering variations in agencification over time and across countries, in order to strengthen our argument about the constraining impact of oil and gas rent on the process of regulatory agency diffusion that occurred worldwide in the previous decades.