Regulatory Agencies

The independence of regulatory agencies indicates that they can operate without political interference and this ‘independence’ means protection from interference from the political power, particularly from the executive branch through ‘for-cause removal protection’ or through specified terms of tenure with their independence granted by legislation or the Constitution and mechanisms such as collegial membership . For Brown and others:

The key characteristic of the independent regulator model is decision-making independence. This means that the regulator’s decisions are made without the prior approval of any government entity, and no entity other than a court or a pre-established appellate panel can overrule the regulator’s decisions. The institutional building blocks for decision making independence are organizational independence (organizationally separate from …show more content…
The agent-principal relationship is between Congress (the principal) and the independent Agency (the agent), as Posner argues:

one is delegation of authority by legislatures to administrative agencies. As mentioned earlier, legislatures cannot continuously regulate a complex area; they must delegate much of the regulatory function either to courts or to administrative agencies. In the area of economic regulation the legislative choice has generally been the administrative agency rather than the court.

As mentioned before, the establishment of independent regulatory agencies has led to the rise of the ‘regulatory state’ as a policy tool and the waning of the centralised system of regulation. As Majone explains:

among the most obvious structural consequences of the shift to a regulatory mode of governance is the rise of a new breed of specialised agencies and commissions operating at arm’s length from central