The political economy of regulatory stability in Argentina.

Beginning in 1989, Argentina committed itself to a wide-ranging program of utility privatization and the establishment of new regulatory regimes. Following the international best practice, the design of these regimes involved the creation of independent regulatory agencies and the delegation of important regulatory powers to these agencies. At the time these reforms were introduced, there was a reasonable amount of consensus that both privatization and the change in the locus of regulatory power were policy changes that had arrived to stay. Moreover, the expectation was that utility regulation would become more stable than in the past. In this thesis, however, it is demonstrated that these expectations were unfounded. Using deductive reasoning, it is proposed that although delegation to independent regulatory agencies is an important condition for developing stable regulatory policies, equally important for that purpose is ensuring that governments cannot easily reverse that delegation or manipulate its terms. It is also hypothesized that, in the case of Argentina, whether or not this second requirement can be satisfied depends on the legal instrument policy-makers use to define the key features of a regulatory regime. The final claim is that, given the country's institutional endowment, the way regulatory policy is defined has an important consequence. It is less likely to be reversed, and therefore be stable and predictable, if key features of the policy are defined in a statute, than if they are contained within other legal instruments that can be passed - and changed - unilaterally by the executive. To test these hypotheses, the thesis uses three case studies: telecommunications regulation between 1990 and 2001; electricity regulation between 1992 and 2001; and utility regulation - across sectors - between the passage of the Economic Emergency Law in January 2002 and April 2003