Re-Bel e-book 16, Published in English in March 2015, 39 pages
Edited by Estelle Cantillon
Contributions by Jan Bouckaert and Axel Gautier, Paul De Grauwe and Yumei Ji, Patrick Van Cayseele
In our capitalist societies, the State and the Market are never very far apart and well-functioning markets often go hand in hand with well-designed institutions and regulations. At a time when these are significantly redrawn by developments taking place both at the European level and at the national level, we cannot avoid a discussion about their adequacy and performance.
This e-book, which is based on a Re-Bel event that took place in December 2013, analyses the quality and performance of Belgium’s regulatory set-up using the lenses of several key sectors. Jan Bouckaert and Axel Gautier’s piece primarily focuses on telecommunications and energy, while Paul De Grauwe and Yuemei Ji’s piece focuses on the banking sector. The choice of specific sectors serves to ground the diagnostic, but the emerging picture is not entirely dissimilar, and raises the issue (among others) of the insufficient independence of regulators in Belgium, both vis-à-vis the regulated sector as well as vis-à-vis the political power. Both contributions identify channels through which wrong incentives for the regulated firms are created. In his comments, Patrick Van Cayseele cautions however against a too hasty call for reform. Economic regulation is complex and involves many trade-offs. We do not live in what economists call a “second best world” but rather a third or fourth best world. Together, the two lead pieces and Van Cayseele’s comments provide a useful first step towards a grounded and objective assessment of the performance of economic regulation in Belgium and I would like to thank all the authors for their contribution to this needed debate.