OECD Reviews of Regulatory Reform: Brazil 2008

Strengthening Governance for Growth

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The debate on a market-based economy has now entered a new phase in Brazil, addressing the broader context of quality regulation and the reduction of regulatory risk. The improved macroeconomic situation and the progress made by the sectoral regulatory agencies have paid off, and there is also wider social participation in the improvement of the regulatory framework with a stronger consumer engagement. But Brazil still needs to further improve its capacities for regulatory quality and increase transparency and accountability in the system to reinforce regulatory performance.

This review analyses the challenges of strengthening regulatory governance in Brazil to improve economic growth, with appropriate regulatory frameworks for core infrastructure sectors. Improved institutional capacities would also enhance support for regulatory policy across various government areas. Setting up an appropriate architecture for sectoral regulatory agencies and balancing autonomy with accountability will contribute to improved governance. Challenges include consolidating the autonomy and status of Brazilian regulatory authorities, reinforcing the strategic organisation for planning and decision making, increasing social accountability mechanisms, and improving co-ordination with competition authorities. Regulatory reform will help Brazil boost growth opportunities, and improve the quality and value of core services provided to its citizens.

Brazil requested this broad review by the OECD of its regulatory practices and reforms. The review presents a general picture of the overall frameworks to assure high quality regulation with a special focus on four core infrastructure sectors: power, private health insurance, land transport and telecommunications.



Assessing the Performance of Regulatory Authorities

The use of performance assessment is crucial in order to improve the quality of regulators’ decisions and actions. This entails determining the impact of the regulators’ acts. Performance assessment may be carried out a priori or a posteriori. A priori analysis consists in a Regulation Impact Analysis (RIA), as analysed in the chapter on capacity for quality regulation. A posteriori analysis includes the evaluation of the regulators’ achievement of objectives through assessment of their economic and social impact with regard to the powers and resources assigned to them. This is essential for institutions financed by public funds that have the obligation to be accountable. The process calls for a need to find a balanced approach, as too rigorous an evaluation could be used to weaken the independence of regulators, thus undermining their action, and the lack of evaluation could raise doubts over their legitimacy and restrict their influence.


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