Foreword

Economic regulators oversee the functioning of markets to ensure quality and delivery of public services and to provide stability for investors. In order to fulfil their role, they need to make and implement impartial, objective and evidence-based decisions that will inspire trust in the public administration. The model of independent economic regulation, based on strong technical capacity, transparency, autonomy and constructive engagement with stakeholders, helps reinforce the legitimacy and integrity of the regulator. This, in turn, builds confidence and supports high-level policy objectives that contribute to better outcomes for the economy and society at large.

The OECD has developed a framework to assess and strengthen the organisational performance and governance structures of economic regulators. The framework analyses regulators’ internal and external governance, including their organisational structures, behaviour, accountability, business processes, reporting and performance management, as well as role clarity, relationships, distribution of powers and responsibilities with other government and non-government stakeholders. The OECD Performance Assessment Framework for Economic Regulators (PAFER) draws on the OECD Best Practice Principles on the Governance of Regulators, which propose an overarching governance framework to drive performance improvements of regulators. This report applies the PAFER methodology to Peru’s Transport Infrastructure Regulator (Organismo Supervisor de la Inversión en Infraestructura de Transporte de Uso Público, OSITRAN). The review builds on knowledge gathered by the OECD Secretariat during the reviews of Peru’s regulators of the telecommunications sector (Organismo Supervisor de la Inversión Privada en Telecomunicaciones, OSIPTEL) and of the energy and mining sectors (Organismo Supervisor de la Inversión en Energía y Minería, Osinergmin), published by the OECD in 2019.

OSITRAN has a unique mandate in Peru. Its core function is to oversee private investment in public-use transport infrastructure by supervising compliance with concession contracts awarded by the Peruvian state. The review finds that stakeholders recognise the technical capacity of the regulator, which has been entrusted with supervising an increasing number of sectors over the years: the total volume of contracts rose from USD 3.1 billion in 2006 to USD 15.2 billion in 2018. However, the regulator operates in a national complex environment where rebuilding trust in public institutions is a key challenge. The review underlines the importance of creating a renewed strategic framework that can strengthen the regulator’s internal culture and common sense of purpose and that can form the basis of renewed relations with external partners. It further recommends bolstering performance reporting, implementing a consolidated integrity strategy, and increasing the efficiency of supervision, enforcement and inspections activities. Finally, the review recommends that Peru’s four economic regulators work together more effectively to share best practices and address common challenges.

This report is part of the OECD work programme on the governance of regulators and regulatory policy, led by the OECD Network of Economic Regulators and the OECD Regulatory Policy Committee, with the support of the Regulatory Policy Division of the OECD Directorate of Public Governance. The Directorate’s mission is to help government at all levels design and implement strategic, evidence-based and innovative policies that support sustainable economic and social development.