Governing competition in electricity markets by independent regulatory agency and government: a comparative analysis on Britain and Türkiye

This thesis examines the immediate relationships between independent regulatory agencies (IRAs), and governments in the British and Turkish electricity sectors in the post-delegation regulatory process. It analyses the impact of these relationships on the capacity of the IRAs to promote competition, which is their primary regulatory objective, and the core reason for their establishment. Both IRAs implemented three main regulatory policies to promote competition: inducing new entry, reducing the market share of the incumbents, and revising the trading arrangements in the electricity market. While various studies have explored institutional and formal/informal factors influencing IRAs' formal/informal independence and regulatory capacity, this thesis focuses on the role of government. It investigates how government influence affects the IRAs' capacity to achieve their regulatory objectives and whether the presence or absence of government support plays a determining role. This research adopts a comparative case study method, analysing 12 (twelve) cases across Britain and Türkiye. It analyses four sets of three cases based on the three main regulatory policies followed by the IRAs in pairs, comparing them in terms of the presence and absence of the government support. The comparison is grounded in similarities between sectoral policies, regulatory objectives, institutional endowments, and initial bargains between IRAs and governments. The thesis’s findings indicate that IRAs’ capacity to achieve their regulatory objectives depends on government support after delegation. While the IRAs struggle to maintain their independence and capacity through institutional endowments and strategic adjustments through various conflictual/collaborative relationships with the governments, the governments continue to determine regulatory decision-making, and the IRAs’ capacity through formal/informal mechanisms, even without changing/breaking the initial formal/institutional designs and bargains established at delegation. The research highlights that regulation remains inherently political, and delegation to IRAs does not ensure political certainty/stability, predictability, reliability, or credible commitment. Political will continues to shape the post-delegation regulatory process.