The consumer: a source of regulatory legitimacy?

Economic regulation by independent regulatory authorities is traditionally justified in a legal sense by theories based on delegation, (partial) ministerial responsibility and judicial review. More recently, regulatory contracts and stakeholder representation provide a similar function. All these models focus either on the relationship between the regulator and the central authority, or on the parties subject to economic regulation, but do not focus on the ultimate objective of regulation: consumer benefits. Can the consumer, or the general consumer interest, act as an additional source of regulatory legitimacy? Healthcare regulation in the Netherlands provides a good context for this question. The Dutch Healthcare Market Regulation Act (Wmg) creates the possibility of a new starting point for legitimacy, because it not only introduces the general consumer interest as a legal concept, but as the priority objective of regulation. In a recent TILEC discussion paper, Wolf Sauter (TILEC, NZA) investigates how to interpret this new concept, operationalised in three variables: quality, affordability and accessibility. His analysis draws on the economic approach to regulation (market failure, market power, bounded rationality), and whether it can provide a non-trivial source of legitimacy, based on the results achieved in serving the statutory constituency of the regulator: the consumer.