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Economic regulators are key actors, ensuring the affordability, quality and accessibility of essential services. The stakes are high: regulators’ actions affect market outcomes and can have strong social and environmental implications. Fast-changing markets and exogenous shocks make balancing these outcomes even more challenging today. They are expected to provide stability to markets that are constantly changing, and to design regulations that protect public interests without impeding innovation. Remaining effective in a dynamic context requires mature regulators that are agile and forward-looking, comfortable in the use of their regulatory discretion to advance long-term policy objectives. It also requires more proactive dialogue and co-ordination to enhance role clarity and independence.
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The Performance Assessment Framework for Economic Regulators (PAFER) was developed by the OECD to help regulators assess their own performance. The PAFER structures the drivers of performance along an input-process-output-outcome framework. This chapter applies the framework to the governance of Brazil’s national electricity regulator (Agência Nacional de Energia Elétrica – ANEEL) and reviews the existing features, the opportunities and challenges faced by ANEEL.
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Measuring regulatory performance is challenging, starting with defining what to measure, dealing with confounding factors, attributing outcomes to interventions and coping with the lack of data and information. This annex describes the methodology developed by the OECD to help regulators address these challenges through a Performance Assessment Framework for Economic Regulators (PAFER), which informs this review. It first presents some of the work conducted by the OECD on measuring regulatory performance. It then describes the key features of the PAFER and presents a typology of performance indicators to measure input, process, output and outcome. It finally provides an overview of the approach and practical steps undertaken for developing this review.