Introduction

The question of multiregulation in developing countries has many dimensions. First, one can think of geographical decentralization as one aspect of the problem. Should we have federal regulation in federal states or should we decentralize regulation in each state? For example, should we recommend federal regulation of telecommunications in Brazil or a two-tier system of state and federal regulation as in the United States or the European Union (EU)? Or, for water distribution, should we recommend regulation at the level of provinces rather than national regulations? These questions show that we must have a clear understanding of the pros and cons of decentralization to deal with our topic. Second, what is the desirable industrial scope of a regulator, or how many industries a regulator should supervise, is another question to answer when designing regulation. Should we have one regulator per industry, or one regulator for all industries, as in Panama and Jamaica, or should we recommend one for each industry, as in Mexico and Canada? Should the optimal design evolve over time, as the integration of gas and electricity regulations in the United Kingdom might suggest? Third, regulation has several functional dimensions, including regulation of prices, quality, environmental effects, entry and can be ex ante, as traditional regulation, or rather ex post, as competition policy. Should we have a single national body to deal with regulation and antitrust, as in Australia?