Collegiality and efficiency in bureaucracy

Abstract

This article addresses the relation between the design of regulatory agencies and efficiency, arguing that authority concentrated to a single individual outperforms more collegial decision-making when the regulated firms’ interests are aligned. The tentative explanation is that concentrated leadership reduces the risk for capture. This argument is developed from an empirical case on the markets for mobile and fixed broadband. In the mobile market, the regulated firms are similarly positioned, whereas in the fixed broadband market, the firms typically have adversarial positions, with an incumbent being challenged by entrants. A statistical analysis of regulatory agencies in 33 European countries lends support to the argument that regulation of mobile broadband benefits from having a single decision-maker whereas a bureaucratic regulation with more collegiality functions as well for the fixed broadband.