Brazil must strengthen governance to sustain long-term economic growth, says OECD

 

28/05/2008 - Brazil should strengthen its institutions and improve the regulations for key sectors, such as electricity, telecommunications and transport, in order to boost its economic growth and the quality and value of core services to its citizens, according to a new OECD report.

In Brazil - Strengthening Governance for Growth, the OECD says the regulatory agencies in core sectors and greater reliance on competition have helped Brazil’s economic performance.

However, if Brazil is to continue to take advantage of the benefits of globalisation, it needs to put in place a better regulatory framework and further modernise some of its core infrastructure, including energy, communication and transport. This will help to increase much-needed investment and improve service quality for citizens.

Regulatory agencies have played a key role in improving standards of service, notably in the private health insurance sector. Rail and bus transport have improved, and the highway concession of over 2000 kilometres granted in 2007, the first in a decade, is a positive sign for the future in terms of involving private capital in public projects.

Challenges remain, however. Among specific actions, the OECD recommends that Brazil:

• Broaden efforts to integrate a “whole-of-government” approach for regulatory quality supported at the highest political level;
• Improve co-ordination between ministries, agencies, regulatory institutions and levels of government. These should also be improved in sectors such as energy for natural gas, environmental licensing, telecommunications and transport;
• Put in place a system to assess the economic and social impact of new laws, with formal consultation processes;
• Improve existing regulations to better serve the interests of citizens and the private sector;
• Consolidate the autonomy and statute of the regulatory authorities in order to strengthen their powers and resources, staffing and governance structure;
• Reinforce the strategic framework for planning and decision making in regulated sectors and strengthen ministries' capacities, particularly for transport and communications;
• Strengthen the accountability of regulatory agencies towards the public, while maintaining their autonomy;
• Consider institutional changes to streamline appeals processes, to reduce delays and increase certainty for investors. This could involve appointing specialised judges and appellate panels.

This first OECD review of regulatory reform in Brazil is part of an ongoing co-operation programme launched in 1998. Brazil is one of five major emerging economies, also including China, India, Indonesia and South Africa, with which OECD is seeking enhanced engagement. Brazil already participates in the work of several OECD Committees and Working Parties on issues including agriculture, investment, competition and trade and it is a member of the OECD Development Centre. OECD has published a number of other studies on Brazil, on such topics as agriculture, economic policy and competition.

Brazil – Strengthening Governance for Growth is available on request from Spencer Wilson OECD Media Division (tel. + 33 1 45 24 81 18). For further information, journalists are invited to contact Stéphane Jacobzone (tel. + 33 676 03447) or Delia Rodrigo (tel. + 33 1 45 24 16 53) of the OECD's Regulatory Policy Division.

How to obtain Brazil – Strengthening Governance for Growth (ISBN 9789264042933)
• Subscribers and reader at subscribing institutions can access the online edition via SourceOECD
• Non-subscribers can purchase the PDF and/or paper copy via our OECD Online Bookshop or order from your local distributor
• Government officials can go to OLISnet's Publication Locator


 

 

 

 

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