Brazilian's framework of water and sanitation services (WSS) is complex, with several actors from different legal natures and varied rules. The new Brazilian sanitation law aims to achieve universal access to WSS and effective provision of services, encouraging more efficiency by promoting competitiveness. However, the regulatory governance of the sector poses a challenge to achieve these objectives. This article addresses identifying and analyzing the WSS structures based on the Institutional Analysis and Development (IAD) Framework, which provides a multidimensional conceptual map that combines levels of macro and micro situations. Databases from the National Sanitation Information System (SNIS) and the Brazilian Institute of Geography and Statistics (IBGE) were cross-referenced to evaluate the structures that exist in the provision of WSS, focusing on municipalities located in the metropolitan regions and urban agglomerations of Brazil. It is possible to conclude that the IAD Framework helps to clarify the actors, its functions, responsibilities, and the interactions between them, as well as the exogenous factors and how they influence the action arena, reaching recommendations, supported by a Delphi approach, such as to improve industry regulation in terms of governance and regulatory governance.

  • The governance of the WSS is complex.

  • It is essential to understand the actors, forms of interaction, and the exogenous factors to promote the necessary institutional arrangements in the sector.

  • The IAD Framework aims at the enhancement of the sector planning, highlighting the cooperation between the actors.

  • The new Brazilian sanitation framework stimulates better practices of governance and regulatory governance.

According to the National Sanitation Information System (SNIS, 2021), the total population of Brazil served by water networks is 175.5 million inhabitants, representing a national average of 80.5%. Regarding the sewage networks, the contingent of the urban population served reaches 105.5 million inhabitants, an average rate of 60.9% in urban areas of Brazilian cities. Regarding the treatment of sewage, there is an average rate in the country of 46.3% for the estimate of sewage generated and 74.5% for the sewage that is collected.

Brazilian municipalities have 728,000 km of public water supply networks, of which 61.7 million water connections are connected. In terms of sewage, there are 325,600 km of sewage collection networks, to which 32.5 million sewer connections are linked. In 2020, there was a growth in Brazilian systems, compared to 2019, with 4.6 million new connections in the water network and 1.3 million in the sewage network, corresponding to an increase of 2.1 and 4.2%, respectively (SNIS, 2021).

However, the Institute Trata Brasil (2022) highlights that 35 million Brazilians still do not have access to treated water, and only 22 of the 100 largest municipalities in Brazil have 100% of the water coverage. Even more critical is the level of waste that exists in this sector: of all water collected and treated in Brazil, 38.9% is lost, either with clandestine connections, leaks, thefts, lack of or incorrect measurement of consumption. This loss generates a cost of BRL 8 billion per year. According to estimates made by this Institute, Brazil ceases to generate benefits of up to BRL 1.4 trillion with the absence of basic sanitation. Considering the national average cost to bring water and sewage to housing, the study estimated that BRL 639 billion will be needed over 19 years (2021–2040) for all Brazilians to have access to these services.

The concern about this sector is not only related to the investment necessary for univeral access (the first pillar brought by the new Brazilian sanitation framework – Law no. 14,026 of July 15, 2020) but also to a gap in a better regulatory governance practice, which has a direct relationship with the proper provision of the services (second pillar of the mentioned framework).

At the international level, the Organization for Economic Cooperation and Development (OECD) had already identified multilevel governance gaps in water resource policies related to its management and the provision of associated services: (i) political gap – unclear overlap and allocation of roles and responsibilities; (ii) administrative gap – incompatibility between hydrological and administrative boundaries, with implications for the long-term sustainability of public service companies if they are forced to resort to high-cost water sources; (iii) information gap – informational asymmetries between national and subnational governments and between companies and governments and consumers; (iv) capacity gap – lack of technical capacity, personnel, time, knowledge and infrastructure; (v) funding gap – unquestionable or insufficient revenues from national, subnational and local governments to implement water service policies and invest and operate infrastructure; (vi) gap in objectives – competition and lack of coordination between different ministries; and (vii) accountability gap – lack of concern and awareness of citizens about water service policies, in addition to low involvement of user organizations, in which the absence of data and participation limits the ability of affected groups to raise concerns in public forums (OECD, 2012).

According to Silva (2014), it is important to reach the so-called better regulation as an unfolding of the regulatory system's reform agenda, focused on results, with emphasis on the citizen and based on the improvement of regulatory practices and more effective mechanisms of transparency and democratic participation in a systemic view of government action as a whole.

Therefore, the current questions about regulation and governance are no longer just ‘why’, ‘how much’, ‘if’ and ‘who’, but ‘how’, ‘how intense’ and ‘with what quality’. In Brazil, at the end of the 1990s, the constitutionality of the regulatory competence of agencies was the subject of intense discussions (Cuéllar, 2001; Aragão, 2002; Justen Filho, 2002). Nowadays, the concern is with the quality of competencies and respective control. The administrative capacity to issue regulatory standards is no longer discussed, but the effective impact of them (Oliveira, 2021).

In Brazil's water and sanitation services (WSS), the regulatory activity is of unique complexity, since it is composed of several actors, different legal spheres, and natures, and is also governed by varied standards, depending on the provider, contract, regulator and supervisor of the services. According to Moreira et al. (2018), in the Brazilian context, it is possible to observe the coexistence between norms derived from people with different statures (although not all hierarchically structured), and among such people, distinct normative sources (Constitution; federal, state and municipal laws; cooperation agreements; administrative regulations; corporate statutes of state-owned enterprises and, perhaps the most important of all in practical, contractual terms). Therefore, in Brazil, the regulation of this sector is multilevel and multi-source.

As Andrade & Castro (2017) point out, there is a gap in the integration of the WSS, especially regarding the absence of the development of regulatory governance that provides articulation between ‘water resources’ and ‘sanitation’. According to Dutra et al. (2021), the sanitation sector is peculiar in terms of governance and distribution of competencies among different actors, very important themes and before any substantial or content analysis.

The new Brazilian sanitation framework (Law No. 14,026 of July 15, 2020) tried to fill some of the gaps in the ownership of services. Furthermore, it dealt with institutional arrangements, preventing the conclusion of new program contracts, and giving new contours, e.g., to the regionalized provision of services. As Cohen et al. (2020) highlight, several advances have been observed whether in the bleaching of some concepts, or in innovation in others, and many others are still expected, within the framework of subsequent regulations and also about issues that permeate regulatory governance and associated management of the provision of services.

As Marques & Narzetti (2021) outline, public policies and institutions associated with the WSS must be coordinated to achieve the goals of universal access and improvement services quality, ensuring its sustainability from an economic, social and environmental perspective.

In this context, this article aims to identify and analyze the regulatory governance structures in the sector, with the support of the Institutional Analysis and Development Framework (IAD Framework), a multidimensional conceptual map developed by Elinor Ostrom (2011). The IAD Framework, as highlighted by Araújo et al. (2017), aggregates levels of macro and micro situations, representing one of the most important theoretical contributions in the field of common resource governance and public policies, which places it in a prominent position in such areas of knowledge.

It is relevant to emphasize that this article will be restricted to WSS. This disclaimer is important since, in Brazil, basic sanitation comprises the set of public services, infrastructure and operational facilities of (i) water supply; (ii) sanitary sewage; (iii) urban cleaning and solid waste management; and (iv) drainage and management of urban rainwater (Art. 3°, I, Law no. 11,445 of January 5, 2007). Furthermore, this research is conducted in municipalities located in metropolitan regions and urban agglomerations, considering the social and economic importance of such areas, which cover about 25% of Brazilian municipalities and represent approximately 65% of the country's Gross Domestic Product (GDP), beyond the relevance to the discussions of the sector.

The descriptive methodology was used in this article, through extensive theoretical research and analyses of data, especially from the National Sanitation Information System (SNIS) and the Brazilian Institute of Geography and Statistics (IBGE). After individualized analyses, these databases were cross-referenced in order to evaluate the legal nature, type of service and scope of the service provider of each municipality in the metropolitan regions and urban agglomerations of Brazil. Afterwards, with the IAD Framework support, regulatory governance structures were identified in the provision of these services. Besides, concerning the IAD Framework, a Delphi (argument design) was done to develop pertinent arguments and expose underlying reasons to confirm the policy outcomes.

Thus, the research question that guides this study is to identify the types of regulatory governance structures that exist in the provision of WSS in the municipalities of metropolitan regions and urban agglomerations in Brazil to carry out an analysis of these structures with the perspective of the IAD Framework.

In summary, the purpose of this article is to analyze the structures of WSS in Brazil, with a focus on identifying and addressing the challenges in regulatory governance. The article aims to utilize the IAD Framework to analyze the macro and micro situations of the WSS sector, and to evaluate the structures that exist in the provision of WSS. The article also provides recommendations for improving regulatory governance practices, including the importance of clearly identifying the public policy to be implemented, with well-defined actors and action situations.

This research brings several contributions to the literature. Firstly, a theoretical review of the principal aspects of the IAD Framework was developed, providing the basis for the analyses of WSS structures. Secondly, it is intended to contribute to the improvement of the regulatory governance practices by identifying and analyzing how WSS is provided in the municipalities of metropolitan regions and urban agglomerations in Brazil. Finally, this research aims to study and apply the conceptual model of the IAD Framework in the scope of basic sanitation, mainly in WSS, enabling other analyses related to the sector and not only in Brazil.

Therefore, this article is organized as follows. After this brief introduction, there is a theoretical review of the IAD Framework, its concept, main elements, and applications. Section 3 presents the methodology on which the article is based, followed by, in Section 4, the results and related discussions. Finally, key conclusions are presented, with suggestions and recommendations to improve, especially, the WSS regulatory governance, and to further research into this theme.

In the context of public policies evaluation, especially from the perspective of public policy analysis, can be observed, as explained by Araújo et al. (2017), four main models that help understand and analyze conjunctures and political processes: multiple flows, punctuated balance, advocacy coalitions, and, finally, and more recently, the Institutional Analysis and Development Framework, also called the IAD Framework, whose main exponents are the couple Vincent and Elinor Ostrom.

In order to understand the IAD Framework, it is important to observe two pillars that sustain the current discussion, namely, ‘governance’ and ‘common property resources’. According to McGinnis (2011), ‘governance’ orbits the capacity that community groups, through institutional borders, must organize themselves to manage the related resources and make them more efficient, effective and stable. Thus, it is intended that such resources do not collapse.

As Araújo et al. (2017) explain, there is a close relationship between polycentrism and the concept of governance preached under the IAD Framework. Polycentrism, according to Ostrom et al. (1961), deals with the interaction between the authorities and under what conditions they and their subordinate citizens may act or be prevented from performing their activities.

Moving on to the second pillar, ‘common property resources’ represent a complex exclusion, in which the joint use involves high rates of subtraction, having as classic examples, according to Araújo et al. (2017), water resources, pasture fields, agro extractive forest, the shoal of fish, irrigation systems, as well as genetic materials, knowledge and cultural goods.

Thus, observing the two pillars briefly addressed above, it can be said that, as Ostrom & Ostrom (1977) and Ostrom & Cole (2012) point out, the study of governance is guided by a specific class of ownership of resources called common property resources. In this way, depending on the ownership of resources and their combinations, the positive result for the governance of such resources can be achieved through different institutional formats (Ostrom, 2003).

Araújo et al. (2017) state that Ostrom's intention was, from the centrality in common resource governance, to build an institutional framework that could be applied in several cases to compile variables that would bring common resources closer to cooperation and thus overcome collective dilemmas. In this context, for the authors, the understanding of the IAD Framework goes through three conceptual blocks (Table 1).

Table 1

Three conceptual blocks of the IAD Framework.

Bl.Key pointsConcepts
The situation of action and its internal elements The situation of action is the locus where two or more individuals, together, are confronted with actions that have the potential to produce some kind of result. The internal components of the action situation are: 
1. Definition of actors 2. Each actor's positions 3. Set of allowed actions and the role that maps the actions responsible for each result 4. Potential results 5. Actor's control in relation to the actions and results they generate 6. The Information available to actors in relation to actions and related results 7. Costs and benefits attributed to actions and results 
Exogenous factors The exogenous factors that directly influence a situation of action are:
  • 1. Rules in use;

  • 2. Physical and biophysical conditions; and

  • 3. Community attributes.

 
Additional elements Additional elements are:
  • 1. Interactions: understood as relationships between actors, in which the action of an actor provokes reactions in one or more actors concerning that situation of action. The interaction patterns are materialized in the so-called results;

  • 2. Results: it is the final product of the actor's decision who is in the situation of action;

  • 3. Feedback: is related to the ability of the actors to observe and process the information present in the results, to generate learning and seek collaborative solutions to overcome collective dilemmas; and

  • 4. Evaluation criteria: for example, economic efficiency; equity through equivalence; accountability; compliance with local values; sustainability.

 
Bl.Key pointsConcepts
The situation of action and its internal elements The situation of action is the locus where two or more individuals, together, are confronted with actions that have the potential to produce some kind of result. The internal components of the action situation are: 
1. Definition of actors 2. Each actor's positions 3. Set of allowed actions and the role that maps the actions responsible for each result 4. Potential results 5. Actor's control in relation to the actions and results they generate 6. The Information available to actors in relation to actions and related results 7. Costs and benefits attributed to actions and results 
Exogenous factors The exogenous factors that directly influence a situation of action are:
  • 1. Rules in use;

  • 2. Physical and biophysical conditions; and

  • 3. Community attributes.

 
Additional elements Additional elements are:
  • 1. Interactions: understood as relationships between actors, in which the action of an actor provokes reactions in one or more actors concerning that situation of action. The interaction patterns are materialized in the so-called results;

  • 2. Results: it is the final product of the actor's decision who is in the situation of action;

  • 3. Feedback: is related to the ability of the actors to observe and process the information present in the results, to generate learning and seek collaborative solutions to overcome collective dilemmas; and

  • 4. Evaluation criteria: for example, economic efficiency; equity through equivalence; accountability; compliance with local values; sustainability.

 

The first step should be to identify the situation of action. According to Ostrom (2011), the effort is to predict the behavior of individuals under the motivational and cognitive structure of the actors involved. The next step is to understand the influence of the exogenous factors on the way that actors organize themselves in their relationships.

It is observed that the IAD Framework has been used, with some frequency, in the scope of environmental management. From the IAD Framework, Abreu et al. (2009) analyzed the environmental management of the Porto Alegre Metropolitan Region (PAMR), emphasizing this method helps to understand the advance and barriers to the environmental quality of the PAMR's water resources.

Hinkel et al. (2014) studied proposals of the Ostrom framework for the social-ecological system. In turn, Delgado-Serrano et al. (2017) used the structuring principles of the Ostrom framework to explore how public policies on water resources challenge governance in a community in Colombia.

After the analysis of 69 cases in the field of irrigation, fishing and forestry, Baggio et al. (2016) highlighted the importance of a systemic approach to distinguish different types of common resources and possible signs that lead to the success or not of such systems from a social perspective (i.e., equity, legitimacy, conflict, etc.) and ecological (avoiding resource deterioration) based on IAD Framework.

Furthermore, Rowland (2005), taking the same base, described a methodology for resolving cross-border water disputes that arise when people/states/nations disagree on the sharing of the resource that crosses legal/political jurisdictions.

As Bicudo et al. (2014) emphasize, in addition to being influenced by climate events, the water crisis is a governance crisis. For Araújo et al. (2017), in the Brazilian case, the decentralized management, the greater joint participation of the State, users and communities, and the hydrographic basin as the basic unit of the National Policy were defined in the legislation on water resources, which is not yet sufficiently applied.

It is possible to find in Brazil, as noted by Araújo et al. (2017), papers that seek the analysis of the IAD Framework as a basis for observations of cases in public policies. According to these authors, it is observed that the application of such framework is increasing in frequency, especially in the context of environmental public policies. However, it also has great potential to be used in analyses of various public policies beyond exclusively environmental policies, which makes it attractive to researchers from different areas, besides showing its interdisciplinary character (Araújo et al., 2017).

The model of the IAD Framework, according to Araújo et al. (2017), becomes essential to collaborate with public policy research by displaying dynamic ways of analyzing the dilemmas and changes that are on the spot nowadays, even if such situations remain far from any link with the environmental area.

In this way, considering the concepts and characteristics of this model and the need for a systemic view of water resources, from the entire chain, it is understood that this framework can be used to support the current study, even with the object of provision of a service. In fact, thinking about the whole process the common resource ‘water’ is the key element of the chain.

This article was developed descriptively, based on extensive bibliographic research, especially on the theme of the IAD Framework, its concept, key elements and applications.

Subsequently, the National Sanitation Information System (SNIS) data were also analyzed, focusing especially on the legal nature of the provider, type of service and coverage. Also, all municipalities belonging to metropolitan regions and urban agglomerations of the country were verified in the Brazilian Institute of Geography and Statistics (IBGE) data.1,2

The SNIS data reveal that out of 5,337 municipalities with public water supply systems (99.8% of the sample), only 13 do not have a public system (0.2%) and use individual alternative solutions for service, such as wells, cisterns and kite trucks. Furthermore, the sample gathers information from 1,354 water supply service providers: 28 with regional coverage, 8 microregional and 1,318 local. Regional providers, which serve large groups of municipalities, bordering or not, work in 75.6% of the municipalities (4,046) and serve 75.5% of the urban population covered by the SNIS (2021). Besides, considering the legal nature of the provider, 735 are municipal departments, 464 are municipal or state departments with autonomy, 36 are state-owned companies (30 mixed companies and 6 public companies), 113 are private companies (concessionaires) and 6 are social organizations.

Additionally, the IBGE data were consulted to identify the political-administrative units of Brazil contained in the regions and agglomerations, which are specifically treated due to their planning and management particularities (IBGE, 2020). As observed in the data, there are 74 municipalities divided into 5 urban agglomerations and 1,290 municipalities divided into 74 metropolitan regions, totaling 1,364 municipalities in urban agglomerations and metropolitan regions in Brazil.

After individualized analyses, these databases were cross-referenced to identify the legal nature, type of service and scope of the service provider of each municipality in the metropolitan regions and urban agglomerations of Brazil. In addition, the documents regarding the concession of WSS in the Metropolitan Region of Rio de Janeiro and of the Metropolitan Region of Maceió were examined, with a view, in particular, to the related governance structures. Thus, the structures of the provision of WSS in municipalities located in metropolitan regions and urban agglomerations in Brazil were identified and analyzed. Moreover, with the IAD Framework support, the regulatory governance scenarios were presented; firstly, focusing on the actors and their forms of interaction, and after considering the exogenous factors.

Finally, a Delphi (argument) approach (Carvalho et al., 2017) was conducted to collect stakeholders' opinions about the IAD Framework to improve the WSS regulatory agenda. The goal was to evaluate if and how IAD may confirm and contribute to the WSS governance. The structure of the approach was as in Figure 1 and Table 2.

To sum up, the results were developed: (i) firstly with individualized analyses of SNIS and IBGE data; (ii) cross-referencing these databases; (iii) identifying and analyzing the structures; (iv) using IAD Framework to clarify the actors, its functions, responsibilities and the interactions between them, as well as the exogenous factors and how they influence the action arena; and (v) through a Delphi (argument design) approach with some specialists to bring contributions to improve the conceptual model to the sector and the WSS regulatory agenda. Figure 2 represents the methodology of this article.
Fig. 1

Delphi (argument) structure.

Fig. 1

Delphi (argument) structure.

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Fig. 2

Strategic methodology approach.

Fig. 2

Strategic methodology approach.

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Step 1 deals with the study of the concepts and applications related to the IAD Framework, its main elements and characteristics, to achieve, as a result, a broad theoretical review necessary for the development of the following steps.

After that, step 2 aims to cross the databases related to SNIS and IBGE to identify the legal nature, type of service and scope of the service provider of each municipality contained in the metropolitan regions and urban agglomerations of Brazil.

Step 3 combines the results obtained in the previous stages, namely, the theoretical review and the crossing of databases, to identify the structures of the provision of the WSS in municipalities located in metropolitan regions and urban agglomerations in Brazil.

Step 4 seeks to analyze the regulatory governance structures mentioned above from the perspective of the IAD Framework, to understand how the provision of WSS takes place and contributes to the improvement of regulatory governance practices in the sector.

Finally, Step 5 pursues collecting stakeholders' opinions about the IAD Framework, with an evaluation of the conceptual model on the WSS agenda and which recommendations should be highlighted to improve the regulatory governance of the sector.

The crossing of databases mentioned in the methodological topic shows the following structures of the WSS' provision, which presentation was adapted from Pinto et al. (2015) focusing on the Brazilian reality, specifically the Brazilian municipalities located in metropolitan regions and urban agglomerations.

Figure 3 shows the two types of WSS provisions identified, according to the structure of Brazilian administration: direct and indirect. The first is provided directly by the public part (municipal department). The WSS is provided indirectly in the following situations: (i) by delegation to any entity of indirect administration (municipal or state department with autonomy); (ii) by delegation to the state-owned company; and (iii) from the formalization of a concession contract, common or sponsored.
Fig. 3

Structures of the WSS provision (adapted from Pinto et al., 2015).

Fig. 3

Structures of the WSS provision (adapted from Pinto et al., 2015).

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Figure 4 represents the regulatory governance of those structures based on the IAD Framework, focusing on the actors and their different forms of interaction.
Fig. 4

Regulatory governance structures.

Fig. 4

Regulatory governance structures.

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To explain better the regulatory governance structures, it is possible to outline five scenarios: (A) provision of services by the Municipality; (B) municipal concession; (C) program agreement; (D) concession carried out by the state-owned company; (D) concession carried out by the state government. Table 3 details these scenarios, with their main actors and key forms of interaction.

Table 2

Delphi (argument) structure.

SectionInformation
Section 1 Introduction 
Section 2
Personal information 
  • 1. Professional expertise

  • 2. Current country's name

  • 3. Current representativeness

  • 4. Additional comments

 
Section 3
Familiarity with the IAD Framework 
  • 1. Have you ever heard about IAD Framework?

  • 2. If yes, where and what is the main contribution of this mentioned conceptual model?

  • 3. If not, would you like to know more about it?

  • 4. Additional comments

 
Section 4
IAD and main aspects 
  • 1. In your opinion, does IAD Framework represent well the actors and the situation of action in a WSS agenda, focusing on the Brazilian municipalities located in metropolitan regions and urban agglomerations? Do you have any suggestions?

  • 2. In your opinion, does IAD represent well the forms of interaction in a WSS agenda, focusing on the Brazilian municipalities located in metropolitan regions and urban agglomerations? Do you have any suggestions?

  • 3. In your opinion, could the exogenous factors impact the forms of interaction and the goals of WSS’ universal access?

  • 4. In your opinion, to what extent does IAD improve the WSS agenda?

  • 5. Additional comments

 
Section 5
Additional comments 
Please, feel free to present your comments and thoughts related to our proposal. 
SectionInformation
Section 1 Introduction 
Section 2
Personal information 
  • 1. Professional expertise

  • 2. Current country's name

  • 3. Current representativeness

  • 4. Additional comments

 
Section 3
Familiarity with the IAD Framework 
  • 1. Have you ever heard about IAD Framework?

  • 2. If yes, where and what is the main contribution of this mentioned conceptual model?

  • 3. If not, would you like to know more about it?

  • 4. Additional comments

 
Section 4
IAD and main aspects 
  • 1. In your opinion, does IAD Framework represent well the actors and the situation of action in a WSS agenda, focusing on the Brazilian municipalities located in metropolitan regions and urban agglomerations? Do you have any suggestions?

  • 2. In your opinion, does IAD represent well the forms of interaction in a WSS agenda, focusing on the Brazilian municipalities located in metropolitan regions and urban agglomerations? Do you have any suggestions?

  • 3. In your opinion, could the exogenous factors impact the forms of interaction and the goals of WSS’ universal access?

  • 4. In your opinion, to what extent does IAD improve the WSS agenda?

  • 5. Additional comments

 
Section 5
Additional comments 
Please, feel free to present your comments and thoughts related to our proposal. 
Table 3

Scenarios resulting from the regulatory governance structures.

ScenarioMain actorsKey forms of interaction
A
Provision of services by the Municipality (1–8–9–10) 
  • – Municipality (municipal department or municipal department with autonomy)

  • – User

  • – Regulatory agencies

  • – Society

  • – External control bodies

 
1. Provision of services
8. Contractual and discretionary regulation
9. Processes of participation and social control
10. External control 
B
Municipal concession (4–7–8–9–10) 
  • – Municipality

  • – Concessionaire

  • – User

  • – Regulatory agencies

  • – Society

  • – External control bodies

 
4. Concession agreement
7. Provision of services
8. Contractual and discretionary regulation
9. Processes of participation and social control
10. External control 
C
Program agreement (2–3–5–7–8–9–10) 
  • – Municipality

  • – State government

  • – State-owned company

  • – User

  • – Regulatory agencies

  • – Society

  • – External control bodies

 
2. Associated management
3. Program Agreement
5. Indirect administration bond
7. Provision of services
8. Contractual and discretionary regulation
9. Processes of participation and social control
10. External control 
D
Concession carried out by the state-owned company (2–3–5–6–7–8–9–10) 
  • – Municipality

  • – State government

  • – State-owned company

  • – Concessionaire

  • – User

  • – Regulatory agencies

  • – Society

  • – External control bodies

 
2. Associated management
3. Program Agreement
5. Indirect administration bond
6. Concession agreement
7. Provision of services
8. Contractual and discretionary regulation
9. Processes of participation and social control
10. External control 
E
Concession carried out by the state government (2–4–5–6–7–8–9–10) 
  • – Municipality

  • – State government

  • – State-owned company

  • – Concessionaire

  • – User

  • – Regulatory agencies

  • – Society

  • – External control bodies

 
2. Associated management
4. Concession agreement
5. Indirect administration bond
6. Interdependence agreement
7. Provision of services
8. Contractual and discretionary regulation
9. Processes of participation and social control
10. External control 
ScenarioMain actorsKey forms of interaction
A
Provision of services by the Municipality (1–8–9–10) 
  • – Municipality (municipal department or municipal department with autonomy)

  • – User

  • – Regulatory agencies

  • – Society

  • – External control bodies

 
1. Provision of services
8. Contractual and discretionary regulation
9. Processes of participation and social control
10. External control 
B
Municipal concession (4–7–8–9–10) 
  • – Municipality

  • – Concessionaire

  • – User

  • – Regulatory agencies

  • – Society

  • – External control bodies

 
4. Concession agreement
7. Provision of services
8. Contractual and discretionary regulation
9. Processes of participation and social control
10. External control 
C
Program agreement (2–3–5–7–8–9–10) 
  • – Municipality

  • – State government

  • – State-owned company

  • – User

  • – Regulatory agencies

  • – Society

  • – External control bodies

 
2. Associated management
3. Program Agreement
5. Indirect administration bond
7. Provision of services
8. Contractual and discretionary regulation
9. Processes of participation and social control
10. External control 
D
Concession carried out by the state-owned company (2–3–5–6–7–8–9–10) 
  • – Municipality

  • – State government

  • – State-owned company

  • – Concessionaire

  • – User

  • – Regulatory agencies

  • – Society

  • – External control bodies

 
2. Associated management
3. Program Agreement
5. Indirect administration bond
6. Concession agreement
7. Provision of services
8. Contractual and discretionary regulation
9. Processes of participation and social control
10. External control 
E
Concession carried out by the state government (2–4–5–6–7–8–9–10) 
  • – Municipality

  • – State government

  • – State-owned company

  • – Concessionaire

  • – User

  • – Regulatory agencies

  • – Society

  • – External control bodies

 
2. Associated management
4. Concession agreement
5. Indirect administration bond
6. Interdependence agreement
7. Provision of services
8. Contractual and discretionary regulation
9. Processes of participation and social control
10. External control 
Table 4

Comments and suggestions given by the specialists.

TopicsComments/suggestions
Actors and the situation of action 
  • See the structure of Water Supply and Sanitation Society – SANASA to analyze if it is necessary to add another scenario.

  • Add the Congress as an actor.

  • Add the basis committee as an actor.

  • Add the Federal Government as an actor.

  • Add the figure of interfederative department with autonomy as an actor.

 
Forms of interaction 
  • See if exists any primary conditions, without program agreements.

 
Exogenous factors 
  • The rules and the culture are essential to achieve the goals of WSS universal access.

  • The rules and the culture are very important, as the physical and biophysical conditions are. About the last, see, for example, the additional difficulty to make investments in slums and in irregular and rural areas.

  • See the federal rules.

  • The climatic conditions are also important. See if politics issues and the justice are actors or exogenous factors.

 
The extent the IAD Framework improves the WSS agenda 
  • IAD improves the WSS agenda, especially to do diagnosis.

 
Additional comments 
  • It is interesting to think about the division of provision of services (direct and indirect), especially about the premises to do that (if focusing on the structure of the public administration, case of the paper, or the real provision of services).

  • See the experience of solid waste.

  • It is important to highlight the competencies of the agencies and the multilevel governance.

 
TopicsComments/suggestions
Actors and the situation of action 
  • See the structure of Water Supply and Sanitation Society – SANASA to analyze if it is necessary to add another scenario.

  • Add the Congress as an actor.

  • Add the basis committee as an actor.

  • Add the Federal Government as an actor.

  • Add the figure of interfederative department with autonomy as an actor.

 
Forms of interaction 
  • See if exists any primary conditions, without program agreements.

 
Exogenous factors 
  • The rules and the culture are essential to achieve the goals of WSS universal access.

  • The rules and the culture are very important, as the physical and biophysical conditions are. About the last, see, for example, the additional difficulty to make investments in slums and in irregular and rural areas.

  • See the federal rules.

  • The climatic conditions are also important. See if politics issues and the justice are actors or exogenous factors.

 
The extent the IAD Framework improves the WSS agenda 
  • IAD improves the WSS agenda, especially to do diagnosis.

 
Additional comments 
  • It is interesting to think about the division of provision of services (direct and indirect), especially about the premises to do that (if focusing on the structure of the public administration, case of the paper, or the real provision of services).

  • See the experience of solid waste.

  • It is important to highlight the competencies of the agencies and the multilevel governance.

 

In the structures observed, the actors that are verified in all possible scenarios are (i) the Municipality; (ii) the user of the related services; (iii) regulatory agencies, which may be, depending on the arrangement, municipal, regional or from the state government, and also the National Water Agency of Brazil – ANA, as federal supervisor, beyond the agency responsible for granting water resources, if it is not the same; (iv) society; and (v) external control bodies, such as the courts of accounts.

Furthermore, in the case of compositions in which management associated with the state government was signed (scenarios C, D and E), the following actors are observed: (i) the state government; (ii) the state-owned company, when a program agreement with the Municipality is signed (C and D) or a state-owned company is responsible for the upstream services (E) and (iii) the concessionaire (company or private companies consortium), when a concession is observed (C and D), common or sponsored, made by the state government or by the state-owned company.

Private participation occurs both within the associated management, as mentioned above (C and D), and in the case of the Municipality itself signing its concession contract directly with the concessionaire (scenario B).

The forms of interaction were generally singled out between each actor. The Municipality can provide the services to users: (i) directly, through its direct administration (municipal department) – scenario A; (ii) indirectly, by delegation to any entity of indirect administration (municipal department with autonomy) – scenario A; (iii) indirectly, from the formalization of a concession contract, common or sponsored – scenario B; (iv) indirectly, from the associated management with the state government – scenarios C, D and E.

In the case of scenarios C, D and E, the figure of the associated management is observed, which is the voluntary association between federative entities, through a public consortium or cooperation agreement, as provided by art. 241 of the Federal Constitution3. The associated management within the WSS was traditionally carried out in conjunction with the so-called program agreements, as seen in scenarios C and D, currently prohibited by the new legal framework. Since such compositions are still observed, their mention in this article is important.

The program agreement is a legal instrument that allows a federative body to delegate the execution of public services to another member4. This contractual modality entails detailing the rules for the provision of public services, the tariff policy, the obligations of each party, the modality of regulation and supervision of services, as well as contractual prohibitions to the delegation of the functions of planning, regulation and supervision of services5. This agreement may be signed by bidding dispensing for the delegation of public services6.

The conclusion of a program contract must be preceded by a cooperation agreement between federal entities or the constitution of a public consortium7. This is because the contractual relationship imposes the associated management regime of the provision of public services, which is translated as the sharing of functions and services between federated entities, as well as with public conveners and executing actors who eventually integrate the contractual relationship. In this context, the state-owned company, after the conclusion of the associated management and the program contract: (i) in scenario C, directly provides the services to users; and (ii) in scenario D, realizes a concession, in which the concessionaire will provide the services.

In scenario E, the state government is the so-called Granting Authority, which conducts the concession process and signs the contract with a concessionaire. This agreement will govern the relationship between both parties during the concession period. Still in this scenario, it can be observed that the state-owned company remains responsible for the provision of the services of capture, crude water supply and water treatment, as it is possible to note in the concession of the WSS in the Metropolitan Region of Rio de Janeiro. Therefore, it is possible to verify the relationship between the state-owned company and: (i) the state government (indirect administration bond); (ii) the concessionaire (interdependence contract), which provides the supply and depletion services (downstream).

After completing the bidding process and signing the contract, the concessionaire has a relationship of providing the WSS with users, in all scenarios in which it is present (B, D and E). In the concession contract signed between the concessionaire and the Granting Authority, the rights and duties are included.

In all scenarios, regulatory agencies are responsible for regulating and supervising the provision of public services, either through contracts (contractual regulation) or resolutions and deliberations (discretionary regulation). Furthermore, the agencies are responsible for the granting of water resources and the final disposal of sanitary sewage.

In addition, society and external control bodies are observed throughout the process. Society appears, especially, in the context of the processes of participation and social control, such as public hearings and consultations. In turn, external control bodies are verified when is necessary to realize their functions – in the federal sphere, for example, the IN 81 (2018)8 outlines the norms about processes related to privatizations and public–private partnerships in the context of the Federal Court of Accounts (TCU – Brazil).

Regarding exogenous factors, physical and biological conditions, as well as community attributes, are particular to each Municipality and should be observed in the specific case. For example, the forecasts of expanding infrastructure investment (physical conditions), the form of treatment of crude water (biological conditions) and the accountability measures necessary to improve the relations between actors and governance structures (community attributes).

Due to the rules, in addition to the municipal and state government rules that will apply depending on the arrangement, we observe the following rules: (i) The Federal Constitution; (ii) Federal Law n. 8,666 (1993)9; (iii) Federal Law n. 11,445 (2007)10; (iv) Federal Decree n. 7.217 (2010)11; (v) Federal Law n. 13,089 (2015)12 and (vi) Federal Law n. 13,460 (2017)13.

Furthermore, in the case of private sector participation (scenarios B, D and E), it should be observed: (i) Federal Law no. 8,987 (1995)14; (ii) Federal Law no. 9,074 (1995)15 and (iii) Law no. 11,079 (2004)16.

Regarding the evaluation criteria, according to Law no. 11,445 (2007), the regulatory agency will issue rules on technical, economic and social dimensions of the provision of the WSS, in compliance with the guidelines determined by the ANA. Those rules will cover at least the following aspects: (i) standards and indicators of quality of service provision; (ii) operational and system maintenance requirements; (iii) the progressive goals of expansion and quality of services and their deadlines; (iv) regime, structure and tariff levels, as well as the procedures and deadlines for their fixation, adjustment and revision; (v) measurement, billing and collection of services; (vi) cost monitoring; (vii) assessment of the efficiency and effectiveness of the services provided; (viii) plan of accounts and mechanisms for information, auditing and certification; (ix) tariff and non-tariff subsidies; (x) standards of service to the public and mechanisms of participation and information; (xi) safety, contingency and emergency measures, including rationing; (xii) procedures for supervision and application of sanctions from the contractual instruments and legislation and (xiii) guidelines for the progressive reduction and control of water losses.

In general, and from a broader perspective, considering the evaluation criteria mentioned above, it is intended to universalize access and to effectively provide the service. Each actor will seek specific results, such as the generation of profit in the case of concessionaires and of state-owned companies. The challenge, in long-term agreements with several actors involved and, often, with conflicting interests in practice, as observed in the projects that this article deals with, is to find the socially optimal and collaborative environment necessary to achieve the most general results brought by the norm and expected by society.

To accelerate universalization and make it efficient and responsible, the new Brazilian sanitation framework adopts as one of its main premises the end of program agreements, represented in scenarios C and D. There is a huge transformation in what we currently know by associated management and a scenario of the robustness of other tools to allow collaboration between the public parties, as we can see in the scenario E. The new legal framework inaugurates some incentives to induce governance that allows structuring the provision of network services by delegation to private parties.

However, coordination and integration are still important management challenges. With the program agreements, the state-owned company could provide the services by doing a cross-subsidy between the tariff from the surplus municipalities and the deficit ones. So, there is a tradeoff related to supporting the policy of program agreements (which are implemented without bidding) and the policy of stimulating competition to make the WSS more effective. The new legal framework consolidates this second position (Cohen et al., 2020).

Through competitive procedures and based on the certainty that competition is a good response to the various challenges in the sanitation sector, the new rules remove the leading role of the state and review the concept of associated management, moving the sector from scenarios C and D to E, without prejudice to what is observed in scenarios A and B, mainly within surplus municipalities. Nevertheless, there is a recognition of the need to maintain some cross-subsidy. This is the reason that the new framework highlights the regionalization institutes of services.

To evaluate the scenarios and how IAD may contribute to improve the WSS regulatory agenda, a Delphi (argument design) was realized. In the test phase of the questionnaire, three panelists were invited to participate to evaluate and improve the form and content of the draft version. The feedback was 100% and a little change was made in terms of form. The Delphi technique (argument design) took 15 days as previously defined by the authors.

A total of seven experts, including economists, lawyers and engineers, from the public and private sectors were engaged in such analysis. First, 85% do not know the IAD Framework, but have an interest in understanding better about the conceptual model. Second, after the explanations about the main concepts and elements of the IAD Framework, and analyzing the situation of action, the actors, forms of interaction and exogenous factors, 100% of these specialists realize that the IAD Framework represents well the WSS agenda, focusing on the Brazilian municipalities located in metropolitan regions and urban agglomerations, and could improve the regulatory governance in the sector. The experts that know the IAD Framework (15%) comprehend in the same way. Furthermore, it is interesting to highlight the following comments and suggestions given by the specialists (Table 4), considering the structure of the survey outlined on the topic of methods.

In addition to the universalization of access to the WSS, its effective provision is certainly a relevant measure in a sector so complex and important. Universalizing without the proper provision of services, only to achieve indices, would not be reasonable or desirable by society. It is not by chance that, in the new Brazilian sanitation framework, both principles (‘universalization’ and ‘proper provision’) were placed side by side.

One of the major challenges already existing and posed by the new legal framework of sanitation lies in whether the governance mechanisms will be effective to achieve the desired results embodied both in the universalization of access and in the effective provision of the service.

This article, without any intention of exhausting the subject, sought to identify the regulatory governance structures observed in municipalities located in metropolitan regions and urban agglomerations, important social and economic areas of Brazil, as well as to analyze its main elements, with the support of the IAD Framework.

The IAD Framework helps to clarify the actors, functions, responsibilities and interactions between them, as well as the exogenous factors and how they influence the action arena. The conceptual model assists in evaluating the structures identified and potential scenarios with the examination of the main elements inside each one. This assessment is crucial to improving regulatory governance in a specific situation and even the whole sector, providing a broad view of macro and micro conditions.

As a result, some recommendations to improve regulatory governance in the provision of WSS take into account theory and experts’ interaction including (i) identifying the public policy to be implemented; (ii) understanding the forms of interaction between actors; (iii) enlightening sector planning; (iv) promoting competitiveness and necessary institutional arrangements; (v) developing subsidy policies, and (vi) improving industry regulation in terms of governance and regulatory governance. Thus, it is intended to contribute to the practices in the WSS agenda, based on the following:

  • Well-define actors and actions situations;

  • Focus on reducing transaction costs and effective coordination;

  • Stimulate integration between the different spheres (municipal, state government and federal), observing the necessary process of participation and social control;

  • Understand the rules in use (new legal framework of sanitation, for example); and

  • Observe institutional arrangements that allow cross-subsidies between surplus projects and deficit ones.

Finally, it is understood that the deepening of the scenarios mentioned, especially regarding the internal components of the action situation and the forms of interaction between the actors of each scenario, would be an interesting scope for further study, considering the comments and suggestions given by the specialists on the survey as well. Besides, the application of the frameworks identified in specific cases would also be an additional contribution and complementary to this article.

All relevant data are included in the paper or its Supplementary Information.

The authors declare there is no conflict.

1

Available in: http://www.snis.gov.br/diagnosticos. Accessed June 11 2022.

3

Art. 3, II, of Law no. 11,445 (2007).

4

Art. 13, § 1, I, of Law no. 11,107 (2005).

5

Art. 13, § 3 of Law no. 11,107 (2005).

6

Art. 24, XXVI, of Law no. 8,666 (1993).

7

Art. 241 from Federal Constitution.

8

Available in: https://portal.tcu.gov.br/desestatizacao-e-regulacao/. Accessed June 18 2022.

9

Regulates Article 37, item XXI, from the Federal Constitution, and establishes rules for public administration bids and contracts.

10

Establishes national guidelines for basic sanitation and federal sanitation policy.

11

Establishes rules for the implementation of Law no. 11,445 (2007).

12

Establishes the Statute of the Metropolis.

13

Establishes basic standards for participation, protection and defense of the rights of users of public services provided directly or indirectly by the public administration.

14

Establishes the concession and permission regime for the provision of public services.

15

Establishes rules for the granting and extension of concessions and permissions for public services.

16

Establishes general rules for bidding and contracting public–private partnerships within the public administration.

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