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Enhancing Brazil's Regulatory Framework for Network Industries: The Case of Electricity, Oil and Gas, and Water and Sanitation

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  • Edmar Fagundes de Almeida
  • Nanno Mulder

Abstract

This paper assesses Brazil’s regulatory framework and agencies for several network industries (electricity, oil and gas, and water and sanitation). Private investment can be encouraged by tackling regulatory uncertainty in many areas. To this end, recent initiatives include a new regulatory model for the electricity sector, and new draft legislation on the role and structure of the regulatory agencies (currently in Congress). The overall approach to regulatory reform in network industries, particularly in electricity, is well thought out but the risk of regulatory failure should not be underestimated. Implementation will be the ultimate test of reform in this area. In natural gas, the dominance of Petrobras, the national oil company, throughout the industry has often been perceived as an obstacle to its development. Private investment in water and sanitation is constrained by a lack of clarity over the assignment of regulatory powers across different levels of government. These reforms are consistent with the government’s agenda for growth, focusing on meeting the challenge of improving the business environment. This Working Paper relates to the 2005 OECD Economic Survey of Brazil (www.oecd.org/eco/surveys/brazil). Améliorer le cadre réglementaire des industries de réseau au Brésil : Le cas de l'électricité, du pétrole et du gaz, et de l'eau et de l'assainissement Ce papier évalue le cadre réglementaire ainsi que les agences régulatrices pour plusieurs industries de réseau (électricité, pétrole et gaz, eau et assainissement). L’investissement privé pourrait être encouragé en réduisant l’incertitude réglementaire dans plusieurs domaines. A ce propos, des initiatives récentes incluent un nouveau modèle réglementaire pour le secteur de l’électricité et un projet de loi sur le rôle et la structure des agences régulatrices (actuellement au Congrès). L’approche générale retenue en ce qui concerne la réforme de la réglementation dans les industries de réseau, notamment dans le secteur de l’électricité, est judicieuse, mais le risque de défaillance de la réglementation ne doit pas être sous-estimé. C’est au stade de sa mise en œuvre que la réforme dans ce domaine sera mise à l’épreuve. Pour ce qui est du gaz naturel, la position dominante de la société pétrolière nationale Petrobras dans l’ensemble du secteur a souvent été perçue comme un obstacle au développement de celui-ci. L’investissement privé dans les secteurs de l’eau et de l’assainissement se heurte à un manque de clarté dans la répartition des pouvoirs de réglementation entre les différents niveaux d’administration. Ces réformes se situent dans la lignée du programme de croissance du gouvernement, en mettant l’accent sur l’amélioration de l’environnement des entreprises. Ce Document de travail se rapporte à l`Étude économique de l'OCDE du Brésil, 2005 (www.oecd.org/eco/etudes/bresil).

Suggested Citation

  • Edmar Fagundes de Almeida & Nanno Mulder, 2005. "Enhancing Brazil's Regulatory Framework for Network Industries: The Case of Electricity, Oil and Gas, and Water and Sanitation," OECD Economics Department Working Papers 425, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:425-en
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    File URL: http://dx.doi.org/10.1787/557716522824
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    Keywords

    agence régulatrice; assainissement; Brazil; Brésil; eau; economics of regulation; electricity; gas; gaz; government policy (energy); oil; pipelines; politique publique (énergie); pétrole; regulation; regulatory agencies; réglementation; sanitation; water utilities; électricité;

    JEL classification:

    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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