Sunday, January 27, 2013

Good insights in the UK

I presented my work with Pau Castells on political connections at the Centre for the Market and Public Organization (CMPO) in Bristol last Thursday. And I presented a preliminary version of my analysis of the Spanish government's project to merge the sectoral regulators with the anti-trust authority at the City University Conference on Regulation and Competition in London on Friday. At Bristol I got very constructive criticism on the need to provide more robustness to our two results on the research on political connections: i) that the level of politicization of large firms in Spain is higher than in other countries, and ii) that this level is negatively correlated with firm value. We'll keep working, and let the data speak. In London, I could share ideas on institutional architecture with experts on regulatory governance and former colleagues of mine at the London Business School's Regulation Initiative some years ago, Jon Stern and David Currie, among others. Lord David Currie was the first chairman of the telecom and media regulator, OFCOM, and will the first chairman of the new Competition and Markets Authority, which results from the merger of the Competition Commission and the Office of Fair Trading. I asked him whether he thought that larger multidimensional agencies made monitoring and accountability more difficult, hence jeopardizing independence from political "principals" (politicians and voters), and he interestingly replied that, in his view, merging agencies that deal with converging industries, or that do clear complementary work, actually strengthens independence, but that merging agencies that regulate too disparate things, like energy and communications, would run into the risk I was mentioning. During the conference, a participant that attended my presentation asked me if I thought it was credible that the chairman of a Spanish company that was obliged to sell an important asset as a result of a decision by a competition authority in the UK, had gone to a cabinet minister to ask him to intervene, and this minister answered to him that he couldn't do anything. I told him that it seemed credible to me, and I was left wondering if he offered anything to the minister in exchange for his request, given what seems to have been common practice in Spain.

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