The notice and comment procedure as a mean of building trust in public institutions

The notice and comment procedure used by Independent Authorities in the rulemaking process grants a particularly effective type of participation, able to influence the policymaking in important sectors.Participation in the rulemaking process is a crucial element in overcoming the distance perceived by citizens with public actors, insofar as it grants a more complete picture of the factual reality on which to intervene and the possibility for participants to highlight their needs and interests.
The paper aims, therefore, to examine the implications and potential of the notice and comment procedure in building a relationship of trust between citizens and public institutions.

The participation by the public in the enforcement procedures institued by National Regulatory Authorities: an instrument of “indirect rulemaking”

Similarly to the provisions set out in the council regulation (EC) no. 1/2003, the italian legal framework provides for the possibility, for the undertakings against which a National Regulatory Authority has institued an enforcement proceeding, to offer commitments to meet the concerns expressed to them by the Authority in its preliminary assessment.
The participation by the public in the procedure concerning the evaluation of the submitted commitments (the so called “market test”), represent an instrument by which is strengthened the trust of economic operators and citizens in the activities of those kind of Authorities, and can be improved the regulatory framework, due to the solutions provided in the submitted commitments or offered by the public.
In this perspective, the enforcement proceedings institued by the National Regulatory Authorities can be considered as a form of “indirect rulemaking”.

The role of trust in Financial Regulation

The financial and economic crisis that started in 2008 let to a significant loss of trust in financial markets and financial institutions.
This is partly due to the perception that profits are privatized, while losses are socialized, as governments and, ultimately, taxpayers have repeatedly borne the burden of failed banks.
But without trust, financial markets cannot function efficiently.
So, trust and integrity depend to an important degree on the reputation of financial markets in order to generate reliable valuations of companies and business ventures.
Key elements to focus on to boost confidence in the banking system include better investor protection. And this in turn puts the spotlight on the role of the gatekeepers of the public trust, in particular, supervisors and regulators.

Possible sources of legitimation for Authorities between trust and distrust

Trust appears to be one of the structural conditions for Authority in general, but politics, institutions and public bodies seem to suffer today, all over the world, from a serious crisis (and lack) of trust.
In response to this crisis, a growing need of certifications, authorizations and other attestations which can assure their objects’ reliability can be observed in every sector, strengthening the role of independent and responsible Authorities which can release such decisions and measures.
The “trust issue”, however, though changing its features, still remains: the problem therefore becomes to find a strong source of legitimation for the work, powers and acts of those Authorities, and in practice for themselves as main actors on the public stage, in an ongoing discussion between the political, technical, competence-founded or consensus-based nature of their accountability.