The creation of Independent Regulatory Agencies (IRAs) in
Brazil: The Different Agenda Setting Patterns
Mariana Moura
To be presented at the 5th Biennial ECPR Standing Group for
Regulatory Governance Conference “Regulatory Governance between Global
and Local”, Institut Barcelona D´Estudis Internacionals
25-27 June 2014
Abstract
The first Brazilian regulatory agency was created in mid-90s and the latest one in 2005. Within
about a decade and three presidential terms, ten federal regulatory agencies were created and
they oversee various sectors, including energy telecommunications, oil, environment,
supplementary health care, health surveillance, transport and civil aviation. But, although they
oversee such diverse areas, their institutional format is the same: special autarchies, with
more autonomy than other government bodies or entities in Brazil. The main goal of this paper
is to discuss the context in which these agencies were created (the State Reform) and
determine what where the factors that permitted the agenda-setting of the theme several
times over different sectors.
Keywords: Brazil
State Reform
Agenda-setting
Regulatory Agencies
Stakeholders
Introduction
The first Brazilian regulatory agency was created in mid-90s and the latest one in 2005.
Within about a decade and three presidential terms, ten federal regulatory agencies were
created oversee various sectors, including energy telecommunications, oil, environment,
supplementary health care, health surveillance, transport and civil aviation. One of the most
interesting facts about these regulatory agencies is that, although they oversee such diverse
areas, their institutional format is the same: special autarchies, with more autonomy than
other government bodies or entities in Brazil.
This paper aims to investigate the emergence of the “Regulatory Agency” model in the
Brazilian legal system with the creation the first agencies and how this concept was introduced
in other sectors. The agenda-setting (how these matters were included in the decision-making
agenda) will be analyzed in the light of two theories: Multiple Streams and Punctuated
Equilibrium. The following agencies are currently in operation in Brazil: ANEEL – Brazilian
Electricity Regulatory Agency, Anatel – Brazilian Telecommunications Agency, ANP - Brazilian
National Petroleum, Natural Gas And Biofuel Agency, ANVISA – Brazilian Health Surveillance
Agency, ANS - National Regulatory Agency for Private Health Insurance and Plans, ANA –
National Water Agency, ANTT - National Road Transportation Agency, ANTAQ - National
Agency for Waterway Transportation, Ancine –National Film Agency, and ANAC –National Civil
Aviation Agency.
In this context, the first section of this paper deals with the rise of the Regulatory State
concept in the world, Latin America and later in Brazil, with an emphasis on the public policies
in force at the time to promote a change in the State model concept in the country. The
second section analyzes the initial agenda-setting of the topic, with the so-called firstgeneration agencies – ANEEL, Anatel and ANP. The third section presents the emergence of
second- and third-generation agencies: ANS, ANA, ANVISA, ANTT, ANTAQ, ANCINE and ANAC.
Lastly, an overview of the political context which allowed the emergence of this institutional
innovation will be presented.
1. International Background
The model of regulatory agencies as independent institutions emerged in the United States
in the nineteenth century, with the creation of Interstate Commerce Commission (ICC)in 1887
(NUNES, 2007). However, the model that remained for about a century limited to one country
(USA) and a single sector (Central Bank) became the new convention on how to govern in mid90s, as presented in the graph below:
Graph 1 – Expansion in the number of agencies worldwide
Source: Jordana et al (2005)
The data refers to 36 countries in seven different sectors: in 1983 there were only 34
agencies, this number rose to 174 in 2002 – a hefty increase of over 500%. However, what
factors influenced this phenomenon? Majone (1999) discusses the change of the model from
the positive to the regulatory state. The first supplies directly to citizens, i.e. state-run entities
provide services as a rule, under monopoly. The latter is a “leaner” model that only regulates
the provision of such services. Its role is not to directly manage certain industries, but to pass
laws and establish rules to allow for a better functioning of the same benefits for its citizens.
Vogel (1996) affirms that with the advance of capitalism freer markets imply more rules. This
explains the high number of regulatory agencies. More regulatory institutions, more networks
dealing with regulation and more regulatory instruments are evident on the global, regional
and national levels. This phenomenon is called Regulatory Capitalism by several authors,
including Levi-Faur (2005) and Braithwaite (2006).
In this light, regulatory agencies emerge with the replacement of endogenous regulation, when state-owned enterprises and the ministerial departments which they were connected, at
the same time provide the public service and regulate it – by the exogenous regulation, when
the services and properties become private and regulated by specialized agencies. According
to Majone (1999), ‘These entities are typically instituted by law as independent administrative
authorities, in the sense that they are allowed to operate without hierarchical administrative
control by direct administration entities’. The section below analyzes the transformation from
the Positive to the Regulatory State in Brazil.
2. Brazilian Background
In Brazil, after the period of economic growth observed during the beginning and middle of
the military government, the economy began to stagnate in the 80’s, led by the global crisis in
the 70's due to the oil price shocks. In this sense, the Brazilian crisis affected different spheres:
financial/tax - the state's inability to generate savings to finance infrastructure and social
spending; public administration paradigms– poor quality of public services; politics - resulting
from the loss of legitimacy of the military regime and the ensuing democratic transition
(Bresser-Pereira, 1996). In this light, during the 90’s the government needed to give responses
to these crises, leading to the so-called State Reform, which led to the rise of a new state
model in Brazil – the regulatory model, as this section will address.
A decentralization trend (separation from the political core and greater technical
expertise) was observed, resulting in the creation of agencies in the country, at a time the
government sought to preserve cash resources, restore the confidence of its citizens and
improve the performance of public services. The government programs that allowed the socalled Brazilian ‘Regulatory Explosion’ were the PND - National Debureaucratization Program
and the PDRAE -Master Plan for State Reform.
The PND, a change occurred during the 80’s/90’s, was initially a National Program
Debureaucratization still in the military government and later a National Privatization Program
(Law 8031 of 1990), in the Fernando Collor administration. The first only prevented the
emergence of new public enterprises, while the second was concerned with passing them to
the private sector. Therefore, as direct state intervention was considered potentially less
productive than originally proposed, the privatization process began, with its proponents
claiming that state-run enterprises not subject to market discipline and competing at unequal
terms with their private peers was inconsistent with the new strategy expected for the
country. The following graph presents the number of privatizations that took place in the early
90’s, the first onestaking place under the PND of the Collor government and the Itamar Franco
and Fernando Henrique Cardoso governments, from 1991 to 1996:
Graph 2 - PND Privatizations
18
1991 - 1992
19
15
1993-1994
1995-1996
Source: BNDES
1
A total of 68 government-owned companies and shareholdings have been privatized so
far. This high number of privatizations without a regulatory framework resulted in an
institutional vacuum in many sectors, in special in the Transportation and Film sectors, as no
institution was created after the sale of state-run enterprises to promote and regulate them.
The privatization and market opening which also occurred in the early 90s (after decades of
market control by the military government in Brazil) are important factors that explain the
emergence of the Regulatory Agency model in the country and their transfer to other sectors.
The PDRAE, the plan to reform the state, was also included the context of limited
government interference. Created in 1995 and headed by former President Fernando
Henrique Cardoso, it rated the services of the Brazilian government in four different sectors
and defined that regulation, oversight and promotion should be exclusively performed by the
State. The so-called “Manufacturing of Goods and Provision of Services for the Market” should
be privatized, and the government's role would be limited to regulating private companies.
This required the creation of independent administrative entities to oversee this activity.
This new notion of State, originally brought by the PND and later by PDRAE, had major
impacts on the provision of services in Brazil, mainly in the area of infrastructure. The services
directly provided by the State should be privatized, as observed in the telecommunications and
energy sectors, while services in the private sector, as was the case of civil aviation and
supplementary health care, should be regulated and supervised efficiently by public entities.
However, there was no specific institutional and legal model for the creation of said regulatory
entities, which led the Brazilian government to pursue different regulatory models abroad to
create its own model. The following section will address the theories discussed in this paper to
explain the agenda-setting in the establishment of regulatory agencies in Brazil.
3.
1
Theoretical Model
Data
fromhttp://www.bndes.gov.br/SiteBNDES/bndes/bndes_pt/Institucional/BNDES_Transparente/Privatizacao/histori
co.html (accessedinOct-2013)
This paper focuses on how a particular subject goes featured in the political arena and
is transformed into a public policy (in the case of this paper in particular, into a new
institution). There are several theories that address the so-called agenda-setting of public
policies. This paper focuses on two theories that addresses how a particular subject is covered
in the agenda-setting: the multiple streams and punctuated equilibrium theories.
The multiple streams theory was developed by Kingdon (1995) with the aim of
analyzing how a particular issue becomes relevant at a particular historical moment, drawing
the government's attention and becoming part of the legislative agenda. Kingdon states that
the combination of three different streams is necessary for a public policy to be included in the
government agenda: the issue stream, the ideas (or solutions) stream and the political stream.
Issues can be approached in three different ways: by political pressure, due to a major
event or the dissemination of indicators that classify a particular situation as problematic. The
ideas stream, in turn, is built by a community of experts who are dedicated to a certain topic.
These are formed by different players, including those who make up the legislative
committees, private consultants, academics, etc. The ideas presented by expert communities
are reflected in the “primary soup” of a public policy. That soup includes a multitude of issues
and priority solutions. These ideas are not necessarily new – they can be a combination of
existing ideas about a topic. The third stream is political. It occurs regardless of the ideas
presented by the streams of issues and ideas. The political stream is formed by the outcome of
elections, lobbying campaigns, partisan and ideological distributions in Congress, changes of
administration, the public opinion “climate”, etc.. These events have a significant impact in
setting the agenda andhelp prioritize certain topics.
The combination of these three streams –issues, solutions and political – forms a policy
window, i.e. this fact forms a window of opportunity that allows a change of trajectory of a
specific public policy with its inclusion in the government’s agenda. At this point, the figure of
the political entrepreneur is critical. These are the players who, in the event of a window in
public policy, present and defend their proposals. Their proposals are subject to one of the
following events: an issue that can be linked to a solution or a favorable scenario in the
political stream. These entrepreneurs have three essential characteristics: they must have an
opportunity to be actually heard, they have political connections or ability to negotiate and,
finally, they are persistent. They may or may not be part of the government.
This theory is important to understanding the different agenda-setting patterns of
regulatory agencies because we can analyze the phenomenon in different sectors by
understanding the different flows (political, issues and ideas) within each of the areas studied
here (telecommunications, energy, health, transport, environment).This paper analyzes
whether there was a political entrepreneur or if the construction of images and the institutions
played a major role in this case. With a view to better understanding the problem, the
punctuated equilibrium theory will be explained below.
Punctuated Equilibrium Model
The Punctuated Equilibrium theory (TRUE et al, 2007) aims to explain a simple
observation: political processes, in general, are characterized by stability and incrementalism,
though occasionally these processes suffer major disruptions to their historical trajectory. The
same institutional context produces both accommodation as a significant number of radical
changes in relation to the past.
The Punctuated Equilibrium theory emphasizes two elements: the definition of
demand (issue) and agenda (agenda-setting). As new demands are included the public policy
agenda and other matters are forgotten, existing policies may be, respectively, reinforced or
questioned. The strengthening of public policies and government programs hinders significant
route changes; however, the questioning of such policies or programs creates opportunities
for major changes in their outcomes.
`
The theory is an alternative explanation to incrementalism, which does not explain in
detail the simultaneous observation of stability periods and radical changes. To explain these
radical changes, proponents of this theory argue that government attention is limited and
therefore issues are given different degrees of inclusion on the agenda over time, which would
explain the periods of calm (incrementalism) and major changes (reforms).
Note that no political system features continuous discussions on all public issues, i.e.
rationality is limited. The fact is that these subjects are divided into a vast number of policy
subsystems, which can be dominated by a single interest, have internal competitions of
different interests, may be dissipated over time or may become independent of the other. In
this light, within these subsystems, most of the issues are treated by a community of experts.
When these issues become the focus of macro policy and start to dominate the agenda,
changes occur in one or more subsystems. Thousands of issues can be dealt with in parallel in
political subsystems by a community of experts before being included in the macro policy
system (parallel processing).
Parallel processing favors only incremental changes, as it tends to be separated from
the major advertising associated with the government's priority agenda. However, sometimes
parallel processing is interrupted and the demands must be addressed sequentially. Certain
institutions are responsible for the sequential treatment of demands, including Congress or
the President of the Republic (or the Ministries). This change occurs when major players
become interested in the process. At this moment, important changes may occur in the course
of these issues.
Other relevant concept is positive and negative feedback. Positive feedback occurs
when a topic is on the macro policy agenda and minor changes in objective circumstances can
lead to major changes in the public policy. Negative feedback, in turn, occurs when minor
changes in the policy will not lead to significant changes, with continued stability.
What determines whether a “hot” issue will or will not have a positive feedback is
interaction between the image (policy image) and the public policy scenarios. The policy image
would be a mixture of empirical information and its emotive appeal. When a single image
widely accepted and supported, a policy is usually associated with a successful monopoly.
However, if a new image is built, it can attract new participants and the multiple scenarios of
the political system are opportunities for political entrepreneurs to move forward with their
proposals.
In this context, the Punctuated Equilibrium theory helps understand the agendasetting of regulatory agencies in Brazil, as it shows how demands for change existing in the
subsystems of each specific sector allowed the building of a new policy image by drawing on
the need for sector regulation by an independent Agency. This process can be considered a
break in the trajectory of each sector, as previously regulation was endogenous within the
respective Ministry. It can be affirmed that the creation of a regulatory agency generates
changes to the respective sector due to the change of image.
In short, these two theories are addresses because the first one, Multiple Streams, has
as main factor the inclusion in the agenda because of the role of the political entrepreneur, i.e.
the actions of an individual, while the second values the role of institutions and their
interaction with policy images. This paper compares the most relevant topics for each
generation of regulatory agencies.
4. First-generation agencies
Before beginning the discussion on the different agenda-setting patterns, it is necessary to
define the generations of the Brazilian regulatory agencies. First-generation agencies have in
common the fact that they regulate monopoly markets and that their main mission is to
control service concession contracts and establish benchmark prices and fair tariffs to
consumers as if the market were competitive: they include the electricity, telecommunications
and oil agencies. The second-generation regulatory agencies addressed in this paper were
created between 1999 and 2000, comprising health agencies (ANS and ANVISA), which also
oversee quality standards and provision of services, although they already operate in a
competitive market. The third-generation agencies are ANA, ANCINE and the transport
agencies ANTT and ANTAQ, created in 2000/2002 and, as with the previous group, operating in
fully competitive markets (SANTANA,2002).
In this context, this topic discusses specifically the creation of ANEEL, ANATEL and ANP,
created from 1995 to 1997. These three agencies deal with infrastructure, a sector that was in
poor condition and in need of investments at that time.
The electricity sector, as shown by the World Bank report released in 1993, had a debt of
approximately BRL25 billion. The state-run entity responsible for power generation, Eletrobras
and other concessionaires were facing a financial and management crisis, due to the policy of
subordinating tariffs to the inflation control policy, with prices insufficient to cover costs. In
this sense, in 1995 the Brazilian government began a study called RESEB - Restructuring of the
Brazilian Electric Sector, led by the Ministry of Mines and Energy, aimed at promoting the
liberalization and privatization of the electricity sector, thus allowing private capital in the
sector, which until then was predominantly run by the state government. In the period
international consultancy firm Coopers & Lybrand, from England, was hired to assist in the
restructuring of the sector.
The President of the Republic then, Fernando Henrique Cardoso, requested greater
independence of the (endogenous) regulatory agency, the National Electricity Department.
However, the technical staff of the Ministry warned on the need to create a new agency with
greater independence and autonomy to oversee energy companies, which now would be
totally or partially private. In this sense, the bill establishing the first regulatory agency was
submitted in February 1995 to be voted in Congress, being sanctioned on December 26 of the
following year, inaugurating the “Special Autarchy” model, which had more independence,
autonomy and transparency compared to any existing government entity at the time. In the
same document submitted by the ministers to the President to present their regulation act
draft, the so-called Statement of Reasons, the then Minister Raimundo Brito emphasizes the
new role of the State:
“It is worth noting the urgent need to adapt the regulatory function in the exploration of electricity to the new
role of the State no longer as an almost exclusively agent of provision of such services, but as a facilitator and
controller of the performance of various interested (private) sectors. The opening of the electricity sector, in line
with the guidelines of the Government of Your honor (President Fernando Henrique), calls for the existence of a
new control structure that reconciles the interests of the explorers of the activity, especially in the private sector,
and consumers, to whom the State must ensure electricity services in sufficient quantity and quality to meet their
needs.”
2
The process of creation of the agency focused on telecommunications began in 1995 with
the approval of an amendment to the Brazilian Constitution that opened the sector to private
companies, ending the monopoly of about 20 years of the State-run Telebras. In Brazil, the
telecommunications market was facing a crisis because Telebras was not able to meet the
consumers’ demand due to the lack of funds to invest in expansion, as was the case with
Eletrobras. This was because the company was also being used to control inflation and
incurred in huge losses. The opening of the sector called for investments in adequate
regulation.
In this context, consultancy firms were hired to support the creation of the
Telecommunications Agency, an agreement was signed between the Brazilian Cooperation
Agency (Ministry of Foreign Affairs), the International Telecommunication Union (ITU), a
specialized agency of the United Nations (Prata, Beirão and Tomioka, 1999). In December 1996
a bill was submitted to Congress creating ANATEL and privatizing State-run Telebras. This was
widely discussed in public hearings, which included the participation of the stakeholders
involved in the process (students, workers, businesses, government etc.) and representatives
of other countries, such as Argentina and the United States, who came to expose the
experiences of their countries. In July 1997 the law was enacted, creating the agency.
The case of oil differs from the other two as it was not accompanied by the
privatization of the respective State-run company. Petrobras remained owned by the Brazilian
government, although the market was opened to competitors (though in a highly controlled
regime). Unlike the other two sectors explained previously, no international consultancy firm
participated in the process: the agency was fully developed by the Ministry of Mines and
Energy. The idea of opening up the market reflected the need to attract investments to boost
production. The bill was therefore submitted to Congress in July 1996, and during the meetings
the most discussed topic was the impossibility of privatizing Petrobras due to the fact that oil
was linked to national sovereignty. Therefore, in August 1997 the bill that creates the ANP was
sanctioned, barring any possibility of transferring the State-run company to the private sector.
2
Statement of Reasons No. 11 of the Ministry of Mines and Energy (Brazil, 1996)
As explained before, the creation of three first-generation State-run agencies ANEEL,
ANATEL and ANP was directly related to the need for reforms in national infrastructure, as
transcribed in the government program of President Fernando Henrique Cardoso:
“The growing partnership with the private sector in the ownership and management of
national infrastructure will require a redefinition of the role of the State Government as a
regulatory body, with power to prevent monopolies and abuses that tend to occur in cases of
concentration of economic power. The government must be able to oversee the provision of
public services and the country’s strategic objectives. (CARDOSO,1994)”
From the theoretical point of view, according to the Multiple Streams theory
developed by Kingdon (1995) on the agenda-setting of public policies, the three streams were
favorable to the initial agenda-setting of the topic: the flow of ideas was exposed in the first
topic of this article, the rise of Regulatory State. The ideas in the official document of Fernando
Henrique Cardoso’s government presented above reached the country in different ways:
through international institutions (World Bank, International Telecommunication Union),
through the hiring of consultancy firms to assist in the development of new regulatory
frameworks and regulatory agencies, and through contact of Brazilian professionals with these
concepts through technical visits abroad. Additionally, Majone (1999) argues that the role of
the Regulatory State, in relation to the Positive State, is not to related to income distribution
and economic stabilization, but to remedy market failures. As it can be seen, Eletrobras,
Telebras and Petrobras acted as inflation regulators: prices were not proportionate to costs;
the aim was to stabilize the economy. As a result, these companies were in debt and did not
have enough funds to invest. This explains the State’s withdrawal from the direct provision of
these services. Attracting private capital was an essential part of the changing role of the State,
which would be leaner and more dynamic and would transfer to the private sector part of its
duties, as in the privatization of State-run electricity companies, with the privatization of
Telebrás and Eletrobras, and Petrobras’s IPO, breaking up the oil industry monopoly.
The issues stream can be represented by the lack of capital for investment in the
national infrastructure sector and poor quality of services: a World Bank study conducted prior
to the creation of ANEEL mentioned a potential energy “blackout” in Brazil; in the
communications sector, the Statement of Reasons presented by the minister mentioned the
huge demand for telecom services and the inability of the sector’s State-run company to meet
it; in the case of oil, more investments were necessary to boost production, and the federal
budget would not be enough. In short, all sectors were in the pursuit of private capital.
Additionally, the political stream was highly favorable to the implementation of this policy:
first, the election of Fernando Henrique Cardoso as President, who had long supported the
creation of regulatory agencies, as it can be noted. The second important factor that confirms
the favorable stream is the governing dominance in both houses of Congress: a total of 397
Federal Representatives in the House of Representatives in 1996, or 77% of the total; and
approximately 75%3 in the Senate.
In this context, it can be affirmed that there was an open policy window, and the
combination of the three streams - ideas, issues and political – by the political entrepreneur
Fernando Henrique Cardoso, who had already proved favorable to the process of transition to
the Regulatory State (due to his participation in PDRAE and in his government plan, as
explained above), allowed the beginning of the agenda-setting of the Brazilian regulatory
agencies. This represented an institutional innovation, more autonomous and independent
than the other departments of the existing government structure. The following section
addresses the creation of the other seven regulatory agencies in Brazil.
5. Second- and third-generation agencies
This topic deals with the other agencies created after the establishment of the “special
autarchy” model, with the development of the first three agencies. It includes the seven
agencies that followed, between 1999 and 2005, as discussed below.
The second-generation agencies are called “Health Agencies”, having been created in 1999
and 2000. The first was ANVISA, which was followed by the ANS. The agenda-setting of both of
them is quite similar, although marked by particular aspects of each sector regulated.
The health surveillance sector in Brazil until the 90s was highly controlled by the
government, which restricted the number of competitors. However, with the guidelines of
Fernando Collor’s PND and in the market opening context, the number of companies increased
significantly, especially after authorization of foreign players (Piovesan,2009). Additionally, in
late 90’s the media began reporting several cases of counterfeit drugs, and the Department of
the Ministry of Health responsible for the sector could no longer meet the demand for
authorizations of new drugs. The supplementary health industry, in turn, was facing a scenario
33
The government parties in the first FHC term were: PFL (Liberal Front Party) , PSDB (Brazilian Social Democrat
Party), PMDB (Brazilian Democratic Movement Party), PPB (Brazilian Progressive Party) and PTB (Brazilian Labor
Party). (NICOLAU, 2000)
of absence of proper regulation, regulation of health plans in Brazil until the late 90s was only
financial, there was no social regulation on the sector and this compromised the quality of
services (Santos, 2000). In this context, with the sanction of the first regulatory framework
(Law 9656 of 1998) an agency was necessary to oversee its implementation.
In this context President Fernando Henrique Cardoso, by request of the Minister of Health
José Serra (former senator), issued an Executive Order4 in December 1998 creating ANVISA,
which was signed into law in the following January. Additionally, in December 1999, still under
the command of José Serra in the Ministry, another Executive Order was submitted to
Congress to create ANS, which was enacted in January 2000.
The first third-generation agency was the ANA. The issue of water in Brazil remained
undefined for decades, it went by three different Ministries: Mines and Energy, Interior and
Environment. However, the 1988 Constitution included a provision that required the Executive
to prepare a specific proposal of a National Water Resources System (Pagnoccheschi,2001).
This legislation was established in 1997 and it provided for the creation of an entity to
implement it. In this sense, the National Water Agency was created, under the Ministry of
Environment, whose bill was presented to Congress in September 1999. ANA was enacted law
in July 2000 and, despite the institutional format similar to that of other agencies, of special
autarchy, it implements the National Water Resources Policy (ANA is not exclusively a
regulatory agency).
After the creation of ANA, attention was focused on ANT. The case of transport differs
from other sectors due to two factors: the high number of subsectors and stakeholders in each
of the subsectors and the economic strength of each of them. The aim of the Brazilian
government was to create a single institution, the National Transportation Agency (ANT), to
regulate and promote the integration of different means of transport in Brazil. ANT would
cover railways, highways, transportation of passengers and cargo, ports and maritime
transport (civil aviation was not included in this scope, for being historically linked to the
military in Brazil).
The idea of creating ANT emerged due to the changes brought by economic opening
and market liberalization under the Collor PND: the State-run entity of the railway subsector
(RFFSA) was closed, with concession of the railways to the private sector; in the road subsector
4
An Executive Order is a legislative rule adopted by the President of the Republic that by definition must be drafted
only in relevant and urgent cases. It becomes effective immediately after its drafting, though it must be approved
by Congress to be enacted law. It must be voted within 120 days. (http://www12.senado.gov.br/noticias/entendao-assunto/medida-provisoria-1)
the first federal highway concessions took place; in the water transport subsector, State-run
entities PORTOBRÁS and SUNAMAN were shut down - the first managed ports and the second
supported merchant shipping companies - and these companies were opened to foreign
capital. The result was an institutional vacuum and worsening of the lack of integration
between different means of transport (Gomide, 2012).
In September 1999 the proposal to create ANT was submitted to Congress, with
several public hearings during its discussion involving the sector’s stakeholders - especially
those linked to the water transport subsector - who proposed a spin-off of the agency into
two: ANTAQ and ANTT, claiming that a single agency would have be dominated by the road
subsector (the largest in the country). Contrary to the government’s will, the proposal was
approved and passed into law in June 2001.
The following agency was ANCINE. The idea of its creation began with the reduction in the
production of national films since the shut down of two state agencies related to the sector:
EMBRAFILME (Brazilian Film Company) and the National Film Institute, also under the National
Plan Privatization in the 90’s. Although in the same period laws promoting tax exemption for
companies that invest in culture (Rouanet and Audiovisual Law) were enacted, they were
insufficient to prevent a decline in production (Alvarenga, 2010). In this sense, the filmmakers
started to lobby the government with a view to drawing greater attention to national films,
arguing that it was a strategic area, a means of spreading the Brazilian culture internationally.
As a result, under the coordination of filmmaker Gustavo Dahl, ANCINE was created. The
proposal was submitted to Congress, and, thanks to the work of an executive group composed
of Ministers from different departments, an Executive Order creating the agency and
establishing a special fund for Films, which was enacted law in November 2001 (within only
two months under the legislative).
The latest federal regulatory agency created in Brazil was the ANAC, which has two special
characteristics: it is disengaged from the discussion of the transport agency, as the military did
not want to give up the regulation of the sector, and the fact that it had been under analysis by
the Congress for five years, the longest of all.
The idea to create the ANAC emerged amid the economic liberalization of the sector.
During the military government in Brazil (1964-1985) there was a strong control of the national
civil aviation sector, prices, airlines and the number of companies that could operate in the
country. Thus, due to strong government intervention in the sector in the late 80s with the
policy of price freezes to control inflation, the major airlines began to record considerable
economic losses, resulting in the bankruptcy of three of the four major companies: Transbrasil,
Varig and VASP. The scenario was therefore of a crisis: high airfare prices and civil aviation
employees fearing unemployment (OLIVEIRA, 2007). In this context, it was presented to
Congress in 2001 a bill creating the ANAC. However, due to the absence of an agreement
among the stakeholders involved in the process and strong lobbying by the companies on
lawmakers who substantially changed the bill proposed by President Fernando Henrique
Cardoso, the Executive requested withdrawal of the ANAC bill, which was only approved in
2005, under the guidance of a new president, Luis Inácio Lula da Silva.
From the theoretical point of view, concerning the second- and third-generation
agencies, there was a break-up in their trajectory, resulting in a significant change in each of
the sectors analyzed, not just incrementalism. The agenda-setting was due to the crisis
identified in each area, generated mainly by the State Reform, which initially was not well
managed by former President Fernando Collor. This reflected the shutdown of many state
entities and departments without a proper regulatory framework or new entities that could
oversee the sectors according to the new reality of privatization and economic liberalization.
This crisis led to the end of the parallel processing of the topics and the beginning of the serial
processing within the decision-making institutions, the Ministries and the Brazilian Congress. In
this sense, unlike what happened with the first-generation agencies, stakeholders of the
Health, Environment, Transport, Civil Aviation and Film sectors organized to pressure the
government to create agencies according to their needs and characteristics. This is evident in
the cases of ANT, with the split of the agency in two due to the demands of stakeholders;
ANCINE, as the agency was only created thanks to the strong lobby of the filmmakers; and
ANAC, in which the lobby of the companies was so strong on the parliament that the project
created by the Executive was totally modified, delaying the creation of the agency.
6. Conclusions
The ten Brazilian regulatory agencies presented in this paper were created in the context
of the State Reform, during the first two terms of former President Fernando Henrique
Cardoso, between 1995 and 2001 (one of which was sanctioned only in the first term of Luís
Inácio da Silva, in 2005). The scenario pointed to a change in the country's NationalDevelopmental (or Positive) State to the Regulatory State model, with the extinction of various
State-run entities and creation of new regulatory frameworks. In the political sphere, changes
were possible thanks to the vast majority in Congress in both FHC governments.
In conclusion, the first three agencies - ANEEL, ANATEL and ANP - had a simultaneous and
similar agenda-setting, while the agencies created in the following years, the second- and
third-generation ones, followed different trajectories with separate agenda-setting for each
sector (Health, Transport, Culture and Civil Aviation). Initially, the State interest prevailed,
while in a second stage, with the creation of the institutional project of the first agencies,
players from different sectors became interested, with a break-up in the trajectory led by a
subsystem demand. Despite the State interest in second- and third-generation agencies,
greater participation of stakeholders involved in the subsystem was observed in this second
phase (as is evident in the ANT and ANAC cases explained earlier). As a response to the
research question, a similar trajectory prevailed in the agenda-setting of the Brazilian
regulatory agencies for the first-generation agencies (ANEEL, ANATEL and ANP), and different
agenda-setting patterns in second- and third-generation agents, driven by the subsystems’
characteristics and the different players involved, who had greater expertise and know-how on
the topic, which was totally new for those involved on the creation of the infrastructure
agencies (the first three agencies).
Glossary
ANEEL - Brazilian Electricity Regulatory Agency
ANATEL - Brazilian Telecommunications Agency
ANP - Brazilian National Petroleum, Natural Gas And Biofuel Agency
ANVISA – Brazilian Health Surveillance Agency
ANS - National Regulatory Agency for Private Health Insurance and Plans
ANA – National Water Agency
ANT – National Transportation Agency
ANTT - National Road Transportation Agency
ANTAQ - National Agency for Waterway Transportation, Ancine –National Film Agency
ANAC – National Civil Aviation Agency.
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