There are four emerging issues that may be used in explaining the essence of new regulatory design. First, rules had to be set in network industries to make access to the non-competitive segments of the industry by a plurality of service providers possible and efficient. Second, in industries where liberalisation had involved the unbundling of vertically integrated monopolies markets had to created ex novo to replace transactions that were previously taking place within the firm. Third, in industries where (non-economic) public interest objectives were ensured within a regulated non-competitive environment, ways had to be found to achieve these objectives in a competitive framework. Finally, where firms had been privatised or activities had been contracted out, regulation through public ownership had to be replaced by an arm’s length regulation.
Arguably, however, the performance of the new regulatory regime in Kenya remains under researched, especially in the context of the peculiar economic and social problems and institutional characteristics. Building effective regulatory structures is not simply an issue of technical design of the regulatory instrument; it is also concerned with the quality of supporting regulatory intuitions and capacity. Many of the institutions that support markets are publicly provided and the effectiveness of these institutions becomes an important determinant of how well market function. The quality of regulatory governance will affect regulatory outcomes, which in turn can be expected to impact on economic growth.
The main purpose of the study is to examine institutional issues in the effectiveness of competition and regulatory regimes in Kenya