Institutional Strength of New Regulatory Agencies of Latin American Countries. The Cases of Peru and the Dominican Republic

The purpose of this article is to answer the following question: have the new regulatory agencies of Latin America managed to overcome the institutional structural weakness prevalent in the public administrations of the countries in the area? The research takes as a starting point the assumption that some recent public institutions -of a small dimension and under strong pressure to be independent from external interference and to leave the traditional clientele model behind (as is the case of the regulatory institutions)- represent an ideal case to find experiences of innovative strategies and organizational institutional options. Among these options is the introduction of their own system of professional civil service, which will create strong, lasting and powerful public institutions.

In-depth field work was carried out (documentary analysis and 82 interviews) in two countries in the region: Peru and the Dominican Republic. The selection came from the interest in analysing two countries that are currently undergoing institutionalization processes which are paradigmatic in the area. The contribution of this research focuses on the academic debate: global administrative reforms as opposed to strategies to encourage the creation of “islands of excellence”. In order to achieve greater institutional strength in political and administrative organizations of Latin American countries, traditionally, the tendency has been to promote general and global reform processes at State level. These general and macro strategies have always failed.

An alternative to macro and general reform processes is to promote institutional improvements in key areas of the institutional complexes of Latin American countries (namely in the economic sector: central banks, tax collection units, customs, foreign trade, regulatory bodies; and outside the economic sphere: justice administration, diplomatic services, etc.). This alternative has been subject to widespread criticism by the majority of academic currents as it is considered that these enclaves of excellence do not reproduce or spread themselves. Instead, they operate as isolated entities which end up with a negative elitist and corporative mindset, generating negative externalities within the system. Faced with the failure of specific or micro initiatives, these widespread academic currents continue to promote global reform strategies.

As an alternative, this study empirically demonstrates that institutional islands of excellence spread, that there is a positive logic of transference between these institutional enclaves and part of the country’s institutional environment. In conclusion, encouraging strong and excelling institutional enclaves favours an incremental process of institutional strength in the rest of public institutions of Latin American countries. Increasingly, the political and administrative culture is transformed, the professionalism of the civil service is consolidated and the old clientele model loses ground.

Key words: Public Organization; Regulation Process; Institutional Analysis; Case Analysis; Latin America; Peru, Dominican Republic