This document discusses regulatory governance in Pakistan. It begins by defining regulatory governance and explaining its importance, particularly for developing countries. It then provides an overview of Pakistan's approach to regulatory governance, including the establishment of numerous independent regulatory agencies during Musharraf's regime to unbundle policymaking, ownership, and regulatory oversight functions. The document lists several of Pakistan's major regulatory agencies and explains their creation was influenced by international trends and policies. It quotes Ishrat Hussain noting the Cabinet established independent regulatory agencies to avoid conflicts of interest, protect consumers, and provide a level playing field for public and private sectors.

2.  “Verily only Islam is the religion before Allah and
the men of book did not dissent but after the
knowledge had come to them, because of their
hearts burning. and those who denies the signs of
Allah ;then no doubt Allah is to call to account
very soon” (Surah Al-Imran ayat 19)

3.  “Again O beloved! If they argue with you, then
say I have submitted my face before Allah and
those who followed me and say to the men of
book and to those who read not; have you
submitted? Hence if they submit they got the
guidance; and if they turn their faces then its upon
you it is only to convey the message and Allah is
seeing his bondsmen” (Surah Al-Imran Ayat 20)

4. Managing The Regulation

5. Flow of topics
 Introduction
 Conceptual basis of Regulation
 Types of regulation
 Case of Geo Super
 Concept of Regulatory state
 Concept of Regulatory governance
 Regulatory governance in Pakistan
 List of regulatory agencies in Pakistan
 Model for effective regulation
 Conclusion

6. Sources
 Regulatory reform and governance: a survey of selected
developing and transition economies by Yin-fang Zhang and
Margo Thomas, IDPM University of Manchester UK and
World Bank.
 Regulatory governance in developing countries Edited by
Martin Minogue and Ladivina Carino.
 Setting and enforcing regulation by Schiavo-Campo, Salvatore
and McFerson, Hazel M.(2008). Public Management in Global
Perspective, New York

7.  Agencification in Pakistan: A Comparative Study of Regulatory
and Service Delivery Agencies (Paper for the EGPA CONFERENCE, 7-
10 September 2010, Toulouse, France SG6: Governance of Public Sector Organizat
ions ) by Aisha Rizwan & Prof. Muhammad Zafar Iqbal Jadoon
 Cabinet Division - Government of Pakistan.
 PEMRA
 Pakistan media watch
 PEMRA ordinance 2002

Institutions For Market Governance And Doing Business by Ishrat
Hussain

8. INTRODUCTION

9. Regulation
Economic Theory of Regulation by
Adam Smith
 Market failures

10. Basis for Regulation
 Public Interest theory of the English Economist Arthur
Pigou,
 An economic theory that holds that regulation is supplied
in response to the demand of the public for the correction
of inefficient or inequitable market practices.
 To benefit society as a whole

11. Regulation
 Regulation is broadly defined as imposition of rules by
government, backed by the use of penalties that are
intended specifically to modify the social and economic
behavior of individuals and firms in the private sector.
(OECD)
Regulatory Targets:
 Prices,
 Output,
 Rate of return (in the form of profits, margins or commissions),

Disclosure of information

12.  Indeed, the single most important source of
corruption the world over is a complex, opaque
and overlapping regulatory framework.
 Accordingly, the strongest single anti-corruption
measure, is regulatory simplification and
streamlining.

13. Deregulation
The relaxation or removal of regulatory constraints on firms
or individuals.
 Promoting competition
 Market oriented approaches

14. Re-regulation
When new or additional regulations are enacted after an
industry or sector is deregulated.
 Reversing deregulation where it turns out to be
impractical or unmanageable.

15. Sources of Regulation
 Central government
 Provincial government
 Local government

16. Benefits & Costs of Regulation

17. Benefits of Regulation
 Provide predictability and consistency for those outside
as well as inside the government.
 Reduce the scope for arbitrary behavior
 Enhance the likelihood of orderly and efficient
transactions
 Help legislators and citizens alike in holding agencies
accountable. (as all agencies have been created under
special law)

18. The Costs of Regulation
 Costs to the government of administering the regulation.
 Administrative and paperwork costs for businesses and
citizens…in developing countries this cost s estimated at
almost 2% of GDP.
 Especially heavy costs for the poor and for those without
“connections”.

19. Quality of Regulation
 The quality of regulation is inversely related to the
volume of regulation
 without an improvement in regulatory capacity,
enforcement becomes more and more difficult, the
more rules are to be enforced.

20. Types of Regulation
 Economic Regulation
 Social Regulation
 Administrative Regulation

21. Economic Regulation
Directly affects the market, such as rules on pricing,
competition, market entry or exit, employment, and
access to credit.
 National Electricity Power Regulatory Authority (NEPRA)
 Oil and Gas Regulatory Authority (OGRA)
 Pakistan Telecom Authority (PTA)
 Pakistan Electronic Media Regulatory Authority (PEMRA)

22. Social Regulation
Protect public interests, such as environment, health, safety
etc (ex health warning on cigarettes)
 Pakistan Medical Dental Council (PMDC)
 National Horticulture Authority (NHA)
 Health Development Agency (HDA)
 National Disaster Management Authority (NDMA)

23. Administrative Regulation
An administrative regulation is a regulation, issued by an
administrative agency under authority granted by a legislature,
rather than by a legislative body itself.
 Administrative control of NCHD (National Commission for
Human Development) by Cabinet Division

24. PEMRA vs. Geo Super

25. PEMRA & Geo Super
 A show cause notice was issued by
PEMRA to Geo Super for suspending
its satellite transmission since April 5
in contravention to Section 28 of
PEMRA Ordinance 2002 and clause
24.1 (c) of the license terms and
conditions which prohibits any
broadcast media or distribution
service operator from ceasing or
suspending broadcasting.

27.  As a Pakistani citizen, sports lover and in national interest I
hereby give license* to GEO SUPER to broadcast my
country’s first and only sports channel from Pakistan.
 *I also request the regulator and courts to enable GEO SUPER
to broadcast from Pakistan

29. REGULATORY GOVERNANCE

30. Concept of regulatory governance
 The concept of regulatory governance is still
relatively new even in developed economies.
 It can be seen as the framework for
regulation and defined as ‘the mechanisms
that societies use to constrain regulatory
discretion and to resolve conflicts that arise in
relation to these constraints’ (Levy and
Spiller, 1994, p.205).

31.  More precisely, the concept covers both the
design and implementation of instruments
and methods for assessing the impact of
regulation, and the governance principles
such as transparency, accountability,
efficiency, adaptability and coherence
(OECD, 2002).

32. The regulatory governance agenda .
 Adoption of processes and institutions
 Assurance of the quality of regulation.
 Maintenance and improvement over time.
 regulatory structures as an integrated whole.
 Linkage of regulatory reforms.
 Incorporates governance values.
 The central principle is that the success of
regulatory reform.

33. Background
 Interventionist government replacement by
minimal state.
 Result: “Regulatory State”
 Emphasizes on “better regulation” and “good
governance”

34. Importance
 Nicoletti and Scarpetta (2003); Estache
(2004); Dollar and Kraay (2002) suggested
that Good governance in general and
regulatory governance in particular is critical
to a sustainable development process while
excessive regulation has negative effects on
private investment, international trade and
growth.

35.  Appropriate regulatory frameworks are
needed to tackle market failures, which can
take the form of pervasive externalities in
market transactions, monopoly abuse,
missing markets and information
asymmetries (Parker, 2002).

36. ISSUES REGARDING DEVELOPING
COUNTRIES
 It is most true that issues are there in
developing and transition economies.
 Lack of accountability, transparency and
consistency in policy formulation and
implementation.
 Foreign investors are discouraged from
investing .
 Realization of urgency to improve regulatory
governance.

37. More and bigger difficulties for developing and transition
economies.
 Transference of best practices from developed countries.
 A reality gap between ideas of best practice and the
actual legal, administrative, political and economic
processes that exist in low- and middle-income countries
means that a ‘one size fits all’ approach is likely to
produce perverse outcomes, or what is called ‘fatal
remedies’ (Hood, 1998, p.208).
 Lack of the essential institutional underpinnings .
 Consideration of a wider range of objectives.
 Emphasis on ‘pro-poor development’.

38. Regulatory Governance in Pakistan
 Regulation through regulatory agencies.
 Musharraf’s Regime.
 Development and establishment of new
regulatory agencies at a large scale.

39. The List of few regulatory agencies in Pakistan are
given below:
1. Pakistan Medical & Dental Council (PMDC)
2. National Horticulture Authority (NHA)
3. Health Development Agency (HDA)
4. National Disaster Management Authority (NDMA)
5. National Electricity Power Regulatory Authority (NEPRA)
6. Oil and Gas Regulatory Authority (OGRA)
7. Pakistan Telecommunication Authority (PTA)
8. Pakistan Electronic Media Regulatory Authority (PEMRA)
9. National Commission for Human Development (NCHD)
10. Pakistan Engineering Council (PEC)

40.  Creation of the autonomous bodies revolved
around two main reasons:
1. International trend and policies of
international financial institutions.
2. To provide a professional goal-oriented
environment to the agencies.

41. According to Ishrat Hussain
 Until the beginning of this decade all functions of policy making,
ownership of the assets and regulatory oversight in Pakistan were
bundled together and carried out by each Ministry. In early 2000s the
Cabinet decided to unbundle these functions to avoid conflict of interest,
protect consumers and provide a level playing field for both the public
and private sectors. The concern was: How can a private firm compete
with a public sector firm in the same field when the owner of the latter
firm enjoys substantial relative advantages.
 The Cabinet therefore set up an independent regulatory agency not
answerable to the Ministry to carry out regulatory functions, it
established autonomous Boards of Directors consisting mainly of
independent non-executive Directors to govern the public sector firms
and made the Ministry responsible for policy making only. This pilot
experiment was carried out in the case of the Ministry of Petroleum and
Natural Resources (MPNR). Oil and Gas Regulatory Authority (OGRA)
was set up to regulate the oil and gas sector.

42. MODELS
 Here I will discuss two models :
1. 360 degree view of accountability
2. The circle of accountability through the
regulatory cycle

43. 360 degree view of accountability
Regulatory
agencies
parliament
The courts
Interest groups
Regulated
companies
Consumers
and
customers
Consumer
representative
bodies
citizens
ministers

44. The circle of accountability through
the regulatory cycle
regulatory objectives
parliament and government parliament and government
The regulatory framework implementing lessons
Ministers regulators
Implementing regulation c conclusion of scrutiny
Ministers and independent courts overturn decisions
regulators
regulatory decisions
Macro
•Appropriate statutory framework to meet
the objectives of the regulation
Micro
•Competent authorities whether ministers
or independent regulators
Reform
•Formal proposal for revision of the
statutory framework and repeal of
unnecessary regulations
•Revised codes and guidance
•Improved regulatory practice
Regulating the regulators
•Complaints, appeals to the courts,
tribunals and commissions and judicial
review
•Scrutiny of decisions by parliament,
national audit office, consumer bodies,
press, experts and citizens.

45. CONCLUSION & SUGGESTIONS
 Capacity up gradation.
 Attention to strong enforcement.
 Role of government.
 There is no one “shoe fits all”.
 Filling of gaps.
 Three key elements focus:
1. Regulatory policies
2. Tools
3. Institutions

46. Kirkpatrick stated in 2006 :
“In search for better
governance,
regulatory reform is critical.”