Agency under constraint: Ideological preferences and the politics of electricity regulation in Latin America

Abstract

Whereas both the literature on globalization and the literature on regulatory diffusion stress the pressures that led to policy convergence, this article shows how the ideology of incumbents produced different regulatory outcomes, even in the face of strong financial and technological pressures that constrained policy agency. By looking at the regulatory frameworks adopted at the time of electricity privatization in Latin America, this article shows that right-wing governments adopted regulations that eliminated barriers to entry and investment and limited the discretion of regulators (market-conforming regulations), and that former statists who had pragmatically converted to the market creed instead chose regulations that tended to impose higher barriers to entry and investment and gave regulators wide discretion in conflict resolution and price setting (market-controlling regulations). These findings suggest the need to look at the ideology (and ideological legacies) of government coalitions for a more nuanced understanding of the process of regulatory diffusion that took place across many sectors in most regions of the world. © 2011 Blackwell Publishing Asia Pty Ltd.