responsibilities or the power to force concessionaires to act. Only some agencies were able to hire or train expert staffers, win authority to punish noncompliance, or acquire additional sources of leverage over concessionaires. The latter were more able to check price increases and compel service improvements. Regulators in Latin America faced these and other acute challenges. Public sectors in the region were much lower capacity than in countries where regulatory agencies first emerged. Privatization was unpopular in many areas, which increased pressure for re-expropriation; populist politicians pressured regulators to favor users. In several cases, politicians curtailed regulators’ authority or autonomy so they could directly confront or negotiate with concessionaires. Formal institutions also incompletely bind politicians’ and bureaucrats’ actions, such that agents were unable to initially undertake all their delegated responsibilities. Existing bureaus often declined to relinquish overlapping policy authority. These outcomes shape state control. Low-capacity and low-authority agencies may be unable to check concessionaire abuses and more subject to capture. For example, improper cost estimates by the Brazilian federal energy regulator allowed firms to overcharge users by five billion dollars. Under-funded agencies or those lacking adequate powers may also be unable to stop dangerous, abusive and illegal activity. However, scholars know little about changes in post-creation capacity and authority in developing world regulatory bodies. In this article I study the development of capacity and authority in subnational regulatory agencies in two Brazilian states. Between 1997 and 2010, twenty-one of twenty-seven Brazilian states created regulatory agencies to oversee public service concessions. State governments created agencies at roughly the same time they privatized utility firms. In doing so, they set
responsibilities or the power to force concessionaires to act. Only some agencies were able to hire or train expert staffers, win authority to punish noncompliance, or acquire additional sources of leverage over concessionaires. The latter were more able to check price increases and compel service improvements. Regulators in Latin America faced these and other acute challenges. Public sectors in the region were much lower capacity than in countries where regulatory agencies first emerged. Privatization was unpopular in many areas, which increased pressure for re-expropriation; populist politicians pressured regulators to favor users. In several cases, politicians curtailed regulators’ authority or autonomy so they could directly confront or negotiate with concessionaires. Formal institutions also incompletely bind politicians’ and bureaucrats’ actions, such that agents were unable to initially undertake all their delegated responsibilities. Existing bureaus often declined to relinquish overlapping policy authority. These outcomes shape state control. Low-capacity and low-authority agencies may be unable to check concessionaire abuses and more subject to capture. For example, improper cost estimates by the Brazilian federal energy regulator allowed firms to overcharge users by five billion dollars. Under-funded agencies or those lacking adequate powers may also be unable to stop dangerous, abusive and illegal activity. However, scholars know little about changes in post-creation capacity and authority in developing world regulatory bodies. In this article I study the development of capacity and authority in subnational regulatory agencies in two Brazilian states. Between 1997 and 2010, twenty-one of twenty-seven Brazilian states created regulatory agencies to oversee public service concessions. State governments created agencies at roughly the same time they privatized utility firms. In doing so, they set
Cohon_Adam_WPSA2015.docx