Principles of Good Market Governance

Abstract

This article discusses which legal principles of good economic governance should form the basis of market legislation and supervision. Respect for the principles will contribute to a good functioning regulatory framework which is likely to enhance business confidence and produce the kind of stability required for long-term investment to take place. Several case studies on access regulation illustrate how disrespect for the principles can hamper an effective realization of the goals of a legal framework for the liberalization of a network industry. The article concludes with some recommendations on how to improve the quality of legislation, practices and procedures that affect the market. It is argued that independent administrative authorities should be obliged to adopt of a code of good market governance. The adoption of a code of good market governance will form an extra check on the exercise of discretionary powers and guarantees that the agency's decisions are based on sound economic analysis and comply with the principles of predictability and consistency.