What it Takes to Lower Regulatory Risk in Infrastructure Industries : An Assessment and Benchmarking of Brazilian Regulators

Abstract

This article points out that regulatory
 governance-how regulators manage concession contracts, or
 other public-private contractual arrangements and sector
 laws-can affect the private sector's perception of
 regulatory risk and thus the availability of private capital
 for infrastructure projects. Four key elements of the
 regulatory governance structure can reduce the risk of
 regulatory failure: political and financial autonomy,
 decision-making structures that reduce regulatory
 discretion, access to effective enforcement and other
 regulatory tools, and efficient rules of accountability.
 This note presents an analytical framework based on those
 four elements and applies it in assessing regulatory
 governance in Brazil.