The Iranian Self-Regulation: the challenge of over-politicization and the conflict of interest

Following the international trend of the proliferation of regulatory agencies as a central part of modern governance systems, self-regulatory institutions have gradually secured a central role within the modern regulatory landscape. The Iranian regulatory governance has experienced an evolutionary history from the period when the main regulatory functions were mainly performed centrally by the ministerial departments, towards a time when several technical departments were gradually established within public sector in the late 1990s. It then witnessed the post-privatization era following the amendment of Article 44 of the Constitution in 2005, characterized by the establishment of the National Competition Council and sectoral semi-independent regulatory authorities. Meanwhile, a few self-regulatory professional bodies have also been emerged alongside public departments. The establishment of the Iranian Bar Association in 1953 as well as the Medical Professional Organization in 1957 have been seen as two significant turning points in the country’s history of regulation. Both professional and non-governmental organizations have long enjoyed from some forms of regulatory power supported by relevant parliamentary acts. Whilst they are still rather the most powerful and well- institutionalized self-regulatory institutions by far, recently there are a few representative bodies have also been established expected to undertake some aspects of the regulation of emerging digital businesses in Iran. However, those professional bodies have long been criticized for prioritizing the interest of their members over their delegated regulatory functions. As such, they have been publicly accused as suffering from some forms of conflict of interest leading to the increasing risk of regulatory capture. Furthermore, following the growing political polarization and social incohesion of the Iranian society, those institutions have also been scrutinized for their so-called “lack of impartiality and politicization”. Building upon a contextual analysis of the evolution of the Iranian regulatory landscape, this paper provides an overview of the institutional characteristics of selected self-regulatory institutions. By this, the study aims in shedding light on the regulatory authorities they have been delegated to, the regulatory instruments they are equipped with, the extent of cooperation with statutory bodies they are enjoying from, and the institutional challenges they are tackling with. As such, it shows that the Iranian self-regulation still suffers from the lack of a distinctive institutional design facilitating their complementary function as regulatory intermediaries for statutory authorities as well as reducing the risk of regulatory capture and over-politicization.