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Regulatory governance in Brazilian infrastructure industries

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  • Correa, Paulo
  • Melo, Marcus
  • Mueller, Bernardo
  • Pereira, Carlos

Abstract

The impact of regulation on the economic performance of regulated sectors depends crucially on the appropriateness of the design of the regulatory agencies' structure and process, that is, on regulatory governance. Governance refers not to the policies that emerge from regulation, but rather to the 'inputs' that go into the regulatory process. The current interest in regulatory governance has created the need for a measure to allow comparison among agencies and sectors, as well as over time. Given that there is no obvious way of measuring governance, one solution is to build an index that captures the essence of the concept by translating observable attributes of the regulatory agency and its environment into a number ranging from 0 to 1 (low-to-high quality governance). This paper presents such an index for 21 infrastructure regulatory agencies (federal and state) in Brazil in 2005. This index was based data collected by the authors through questionnaires applied to high-ranking officials at the regulatory agencies. The main index is composed of four sub-indexes that capture issues related to autonomy, decision-making process, tools for effective decision making and accountability. The results show that regulatory governance is relatively similar among the 21 agencies, with better results at the federal than at the state level. In addition it was found that formal attributes do not always translate into effective governance. Of the four dimensions of regulatory governance, the autonomy and accountability were, on average, more developed than decision-making process and regulatory tools.

Suggested Citation

  • Correa, Paulo & Melo, Marcus & Mueller, Bernardo & Pereira, Carlos, 2008. "Regulatory governance in Brazilian infrastructure industries," The Quarterly Review of Economics and Finance, Elsevier, vol. 48(2), pages 202-216, May.
  • Handle: RePEc:eee:quaeco:v:48:y:2008:i:2:p:202-216
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    References listed on IDEAS

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    Cited by:

    1. World Bank, 2007. "How to Revitalize Infrastructure Investments in Brazil : Public Policies for Better Private Participation, Volume 1. Main Report," World Bank Publications - Reports 8047, The World Bank Group.
    2. Alexander Moore & Stéphane Straub & Jean-Jacques Dethier, 2014. "Regulation, renegotiation and capital structure: theory and evidence from Latin American transport concessions," Journal of Regulatory Economics, Springer, vol. 45(2), pages 209-232, April.
    3. Saes, Alexandre Macchione & Loureiro, Felipe Pereira, 2014. "What developing countries' past energy policies can tell us about energy issues today? Lessons from the expropriation of American Foreign and Power in Brazil (1959–1965)," Utilities Policy, Elsevier, vol. 29(C), pages 36-43.
    4. Andrea C. Bianculli, 2013. "The Brazilian Association of Regulatory Agencies: Integrating levels, consolidating identities in the regulatory state in the south," Regulation & Governance, John Wiley & Sons, vol. 7(4), pages 547-559, December.
    5. Lee, Changyen & Cheng, Chun-Fa & Chuang, Min-Ta & Hsu, Wei-Chieh & Chen, Yen-Hung & Cheng, Kuo-Tai, 2018. "How transparency and accountability matter in regulating the Taiwan Water Supply Corporation," Utilities Policy, Elsevier, vol. 52(C), pages 50-58.
    6. Cunha, Bruno Queiroz & Pereira, Ana Karine & Gomide, Alexandre de Ávila, 2017. "State capacity and utilities regulation in Brazil: Exploring bureaucracy," Utilities Policy, Elsevier, vol. 49(C), pages 116-126.
    7. Luis Andres & José Luis Guasch & Sebastián Lopez Azumendi, 2009. "Regulatory Governance and Sector Performance: Methodology and Evaluation for Electricity Distribution in Latin America," Chapters, in: Claude Ménard & Michel Ghertman (ed.), Regulation, Deregulation, Reregulation, chapter 6, Edward Elgar Publishing.
    8. Cassey LEE & Yoshifumi FUKUNAGA, 2013. "Competition Policy Challenges of Single Market and Production Base," Working Papers DP-2013-17, Economic Research Institute for ASEAN and East Asia (ERIA).
    9. repec:gig:joupla:v:2:y:2010:i:1:p:3-30 is not listed on IDEAS
    10. Cheng, Kuo-Tai, 2016. "Test of the mediating effects of regulatory decision tools in the communications regulator," Telecommunications Policy, Elsevier, vol. 40(2), pages 277-289.
    11. Recuero Virto, Laura & Gasmi, Farid & Noumba Um, Paul, 2010. "Does political accountability matter for infrastructure regulation? The case of telecommunications," MPRA Paper 28496, University Library of Munich, Germany, revised 2010.
    12. Terry O'Callaghan, 2009. "Regulation and Governance in the Philippines Mining Sector," Asia Pacific Journal of Public Administration, Taylor & Francis Journals, vol. 31(1), pages 91-114, June.
    13. Trillas, Francesc, 2010. "Network industries and regulatory jurisdiction," IESE Research Papers D/859, IESE Business School.
    14. Lee J. Alston & Bernardo Mueller, 2011. "Brazilian Development: This Time for Real?," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 12(1), pages 37-46, March.
    15. Cheng, Kuo-Tai, 2013. "Governance mechanisms and regulation in the utilities: An investigation in a Taiwan sample," Utilities Policy, Elsevier, vol. 26(C), pages 17-22.

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