use of its budget. Regulatory autonomy is defined by the extension of the agency’s regulatory powers in the electricity sector and is represented by indicators that capture agencies’ responsibilities in electricity regulation.

The second aspect of agency’s governance is **accountability,** which we define as the procedures, mechanisms, and instruments aimed at guaranteeing an adequate level of control of the agency’s budget and performance by political authorities, namely the Parliament. Despite the successful use of mechanisms to assess the performance of agencies by governments, we prioritize the accountability of the agency before the Parliament. We based this decision on two main reasons: First, the fact that the institutional design model we follow is that of a US independent commission, where agencies are subject to parliamentary oversight. Second, the history of political interference of LAC line ministries in utilities underscores the importance of including other political stakeholders, such as the Parliament, in the regulatory process. We consider an institutional perspective of accountability only as defined by the relationships of the agency with the three branches of government (Executive, Legislative and the Judiciary) and do not further dissect the variable.

The third variable is transparency. We define **transparency** as the procedures, mechanisms, and instruments aimed at guaranteeing the disclosure and publication of relevant regulatory and institutional information, the participation of stakeholders in the agency’s regulatory decisions and decision-making, and the application of rules aimed at governing the integrity and behavior of agency officials. We cover two dimensions of transparency: social transparency and institutional transparency. **Social transparency** is composed of indicators related to the involvement of noninstitutional actors in the agency’s policy-making, including their access to the agency’s information. **Institutional transparency** is composed of indicators related to the transparent management of the agency that are not directly linked to stakeholder involvement, and includes issues such as the publication of the agency’s annual report, the use of norms of ethics, and the existence of public exams for hiring employees.

The fourth variable is **tools** , which we define as the instruments and mechanisms that contribute to the strengthening of different aspects of an agency’s functioning and the quality of its regulations. We include not only **regulatory tools** ( _e.g._ mechanisms for tariff revision, regulatory accountability, instruments for monitoring technical standards), but also those instruments aimed at improving the institutional quality of the agency, or **institutional tools** ( _e.g._ audits of agencies’ accounts, electronic files for consumer complaints, performance-based payments for employees, regulatory quality standards). This is the only variable whose analysis does not consider its formal and informal aspects; the sole existence of agencies’ tools implies their actual implementation.

# **3.3 The survey:**

In order to assess the governance of electricity regulators in LAC, we designed a survey that was distributed to all electricity regulatory agencies in the region, including not only national but also provincial or state regulators (particularly in the cases of Argentina and Brazil). All LAC countries that are members of the World Bank Group and have an electricity regulatory agency were included.

We received responses from 43 electricity regulatory agencies, whose coverage in terms of electricity consumers exceeds 90 percent of the region. Despite the high number of responses, due to time and methodological constraints we limited our research to national electricity regulatory

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