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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.

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Government Capacity to Assure High-quality Regulation in Brazil

In the past 25 years, few reforms of the public sector in OECD countries have received more attention than those made to regulation making and regulatory management. Today, all 30 member countries have regulatory management programmes. These programmes are focused on the regulatory management system in place and on ensuring the quality of new as well as existing regulation (Box 1.1). Regulatory policy, as with other core government policies, such as a monetary or fiscal policy, is dynamically focused and founded on the view that ensuring the quality of the regulatory structure is a permanent role of government. This means that governments are taking a pro-active role in implementing regulatory quality assurance systems.

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