freely establish the use of their resources. In terms of the regime that regulates their employees, they generally lack their own structure of posts and salaries and do not utilize incentives to determine their payments.

# **C. Regulatory Autonomy:**

This dimension of agency’s autonomy is represented by the extension of the agency’s regulatory powers. It includes characteristics such as the institution responsible for the regulation of the sector (the agency, Parliament, the Executive or some combination among them); the type of the agency’s powers (consultative, oversight, pricing, and rule-making); the agency’s responsibilities regarding particular issues (tariffs, service quality, consumer complaints, companies’ investment plans, wholesale market, anti-competitive behavior, technical standards); and the agency’s powers to enforce its decisions.

Performance in regulatory autonomy is represented in the Regulatory Autonomy Index. The majority of countries of the region are in Tier 1, with only four countries below T2. Countries at the top of the index are Panama, Nicaragua, El Salvador, Guatemala, and Brazil. Countries with the lowest scores are Mexico, Honduras, Uruguay, and Jamaica.

Countries at the top of the Autonomy Index keep their high positions in the Regulatory Autonomy Index, with the exception of Panama who ascends several places from the Autonomy Index and becomes the top ranking country. Chile improves its <!-- Start of picture text --> Figure 10: Regulatory Autonomy Index<br>Regulatory Autonomy Index<br>Source: LAC Electricity Regulatory Governance Database, The World Bank, 2007.<br>1<br>.8<br>Index (0-1) .6.4<br>.2<br>0<br>PAN NIC ESV GUA BAR ARG R D BRA BOL PER T&T C R ECU COL CHI T1 T2 URU JAM HON MEX<br><!-- End of picture text --> position in the Regulatory Autonomy Index compared to its score in the Autonomy Index. Both Chile and Colombia improve their low scores in political autonomy, joining those countries in the middle of the Regulatory Autonomy Index.

The improvement of Chile in the Regulatory Autonomy Index is explained by the extension of agencies’ regulatory powers. Although the CNE does not determine tariff levels, it has an important role in the regulation of the sector, enough powers to enforce their decisions, and responsibilities in other regulatory issues such as service quality and technical standards.

Countries with desirable conditions in the Regulatory Autonomy Index such as Panama, Nicaragua, and El Salvador have full responsibilities for areas such as tariffs, service quality, standards, and investments, as well as the power to implement sanctions and regulations. By contrast, countries that do not meet the minimum requirements in terms of the extension of their regulatory prerogatives have little responsibility for specific regulatory issues and no powers to enforce regulations. For instance, Uruguay’s _Unidad Reguladora de Servicios de Energía y Agua_ and Mexico’s _Comisión Reguladora de Energía_ have oversight only on issues related to consumer complaints, service quality, and anti-competitive behavior, and lack authority in areas such as tariffs and companies’ investment plans. Moreover, Honduras and Jamaica do not have the ability to enforce their decisions, reducing their capacity to effectively regulate the sector.

It is interesting to observe that there is not necessarily a relationship between the scores in political and regulatory autonomy. Although the best performers in political autonomy (Brazil, Dominican

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