Regulation in Argentina and Brazil. A Comparative Analysis of the Institutional Models

The privatization processes developed in Argentina and Brazil at the end of the XXth century raised the concern of strengthening the regulatory function of the State in relation with privatized public utilities. There was a consensus on the necessity of regulating and overseeing the new markets and controlling utilities. The regulatory target was to eliminate any risk of private monopolies substituting former public monopolies and, at the same time, to enhance market forces and to protect the citizen-user of public utilities, ensuring increased and universalized offer. Both countries tried to set up a new regulatory framework establishing, for that purpose, regulatory bodies and agencies based on the idea of both independence and balanced reports among government, users and public utility firms.

The regulatory systems were established taking in account the federative system in both countries and the constitutional distribution of legal competences as well as previous experiences in regulation. The article describes the functions assigned to the new regulatory authorities (regulation, mediation, arbitration, supervising and punishing), the main goals established for them (competition protection and promotion, protection of users and consumers, environment preservation, protection of public health and the search of the overall objective: the public interest).

This document analyzes the evolution of regulatory models in both countries and their main characteristics (independence, transparency, legal competence, financial and management autonomy, and technical excellence), shows their advantages and shortages, describes the efforts made for strengthening a regulatory culture that permits to aggregate new social actors to the process of providing public utilities and points out the recommendations proposed for their improvement. Accountability of regulatory authorities is also described, as well as social control (public audiences, public consultation, participation in boards). It includes some comments about recent proposals -as a result of current government changes- for revising the regulatory models, in spite of the fact that they are still being implemented, specially in the case of Brazil where the government sent to the Congress a project of a new general law on regulatory authorities. An annex is included describing the very original social control system established in the Brazilian state of Rio Grande do Sul.