9 - Social Concerns in Regulatory Design

Summary

The ability to appreciate and account for the magnitude and complexity of the interactions of efficiency and viability, on the one hand, and social concerns (including equity), on the other, continues to be a major regulatory challenges. One of the keys to effective targeting is to distinguish between lack of access and lack of affordability. For both challenges, regulators can rely on large menu of pricing, direct and cross-subsidies, technological or quality options or service obligations to reduce or eliminate the undesirable social biases. The optimal choice depends on the local preference, on the local fiscal capacity and on the implementation capacity of the regulators. And this requires a specific institutional diagnostic. Regulators should pay more attention to the costly default options often found in menus of service levels, and push for these to be reset so as to maximize the odds of helping those who need it most. To ensure that regulation delivers on the social goals to be addressed, regulators must make the most of the growing volume of data available and use it with more rigour to refine the social targeting efforts.