Outsourcing Risk Governance: Using Consultants to Deliver Regulatory Functions

AbstractThe Australian gas supply industry provides a case study of outsourcing by economic regulators. These regulatory agencies rely on the engagement of external consultants for technical expertise who are effectively tasked with finding ways to reduce proposed expenditure, even for safety-related items. Empirical evidence shows that economic regulators uncritically accept this advice. Such outsourcing raises the possibility of significant impact on technical regulatory outcomes.