Ethics

Main Principles

Core References

Strengthening of the Institutional and Regulatory Structure of the Brazilian Power Sector
World Bank Report on the PPIAF Project for Brazil Power Sector, Task 4, Washington, D.C., December 2002.
Brown, Ashley C., and De Paula, Ericson

Explains that since regulatory expertise is in high demand by regulated companies, disparities in compensation between the regulators and the regulated provide incentives for a “revolving door” that can create, at a minimum, the appearance of impropriety, if not constituting an impropriety itself, and can damage the credibility and effectiveness of regulation. There are two elements of the equation, the first being competitive compensation packages and the second being reasonable ethical standards.

Code of Ethics for the Indiana Utility Regulatory Commission, Executive Order #93-12
Indiana State Ethics Commission

Establishes a code of conduct for the Indiana Utility Regulatory Commission. Commissioners will maintain the independence of the commission, avoid impropriety and the appearance of impropriety, and be faithful to the law. A commissioner is disqualified from a decision if the commissioner is biased or has a conflict of interest.

Building Public Trust: Ethics Measures in OECD Countries
PUMA Policy Brief No. 7, September 2000.
OECD

Describes common ethics criteria in OECD countries. Discusses reasons for ethical conduct. Scores criteria according to frequency of application. Describes approaches for developing and implementing ethical practices.

Bargaining for Advantage
New York: Penguin Books, 1999.
Shell, G. Richard

States that while deception is part of negotiation, ethical slips can cause you to lose credibility. The three frameworks for thinking about these contradictory factors and ethical issues in general are the Poker School, the Idealist School, and the Pragmatist School. Techniques for coping with unethical tactics are also discussed.

Sectoral References

TELECOMMUNICATIONS

Decision-Making Procedures and Ethics Rules: The Practical Enablers of Integrity and Impartiality in Telecommunications Regulation
U.S. Federal Communications Commission, Washington, D.C., August 15, 2002.
Wu, Irene, and Cathleen Xue

Summarizes decision-making and codes of ethics by the Canadian Radio-television and Telecommunications, Hong Kong’s Office of the Telecommunications Authority, the U.K.’s Office of Telecommunications, and the U.S. Federal Communications Commission.

Other References

Against Parsimony: Three Easy Ways of Complicating some Categories of Economic Discourse
American Economic Review 74: 1984, pp. 89-96.
Hirschman, Albert O.

Provide explanations and definitions of ethical conduct.

Bureaucracy: What Government Agencies Do and Why They Do It
New York: Basic Books, 1989.
Wilson, J.

Explains the difference between ethical conduct and bureaucratic conduct.

Key Words

Compensation, Regulatory agencies, Ethics

Conflicts of Interest

Core References

Explains rules that an agency can adopt to limit conflicts of interest, including public disclosure of financial interests, prohibition on the ownership of any regulated operator, recusal from decisions where the regulator is personally affected by the issue or someone close to the regulator is personally affected, and procedures for the agency to deal with commissioners or staff who have a conflict of interest.

Code of Ethics for the Indiana Utility Regulatory Commission, Executive Order #93-12
Indiana State Ethics Commission

Establishes a code of conduct for the Indiana Utility Regulatory Commission. Commissioners and their family members shall refrain from having economic interests with the regulated operators.

Developing and Implementing a Code of Ethics

Core References

Code of Ethics for the Indiana Utility Regulatory Commission, Executive Order #93-12
Indiana State Ethics Commission

A state ethics commission established this code of conduct for the Indiana Utility Regulatory Commission. Commissioners will maintain the independence of the commission, avoid impropriety and the appearance of impropriety, and be faithful to the law. A commissioner is disqualified from a decision if the commissioner is biased or has a conflict of interest.

Practical Guide to Corruption Prevention
Independent Commission against Corruption

Describes what a code of conduct should contain and provides guidelines for developing a code of conduct.

Code of Ethics
New Jersey Board of Public Utilities

The Board established this code of ethics, which addresses outside employment and interests, financial interests in regulated companies, acceptance of gifts, use of official position or information, outside activities, post-employment, conferences and conventions, and representation before and contracts with the state government. An ethics commission is responsible for enforcement.

Principles for Managing Ethics in the Public Service: OECD Recommendation
PUMA Policy Brief No. 4, May 1998.
OECD

Summarizes standards that a code of ethics should meet.

Building Public Trust: Ethics Measures in OECD Countries
PUMA Policy Brief No. 7, September 2000.
OECD

Moral Competence in the Practice of Democratic Governance
in For the People: Can We Fix Public Service, edited by John D. Donahue and Joseph S. Nye, Jr. Washington, D.C.: Brookings (forthcoming).
Winston, Kenneth

Explains moral competence, which it defines as “the set of individual attributes and dispositions (latent moral resources) that make for good governance.” Identifies virtues for a public servant, namely “fidelity to the public good, the duty of civility, respect for citizens as responsible agents, proficiency in social architecture, and prudence.”

Key Words

Ethics, Conflicts of Interest, Transparency

Case Studies

Code of Ethics
New Jersey Board of Public Utilities