Governance a Latin America perspective

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ScienceDirect Policy and Society 33 (2014) 345–360 www.elsevier.com/locate/polsoc

Governance a Latin America perspective Cristina Zurbriggen Eberhard–Karls University, Tubingen, Germany Department of Political Science, Faculty of Social Sciences, University of the Republic, Uruguay

1. Introduction Governance has gained increasing prominence, not only among public policy and administration studies, but also among practitioners. The interest in governance reflects that in our contemporary society, national decision-making processes are becoming increasingly permeable to the influence of international, regional and local actors. In fact, the State reform process in the majority of Latin American countries, characterized by privatization, decentralization and delegation of provision of public services to private sector and civil society actors, has deeply changed the policy making process. In this new complex, changing and multi-actored environment, the State, warranty of the public goods, is unable to solve by itself the current problems of society. Hence, governance addresses the complexity of twenty-first century decision-making processes while the European governance debate highlights the need of thinking about how to govern current society. One mayor change has been the increasing complexity of policy problems and the increasing interdependency of policy areas, policy levels and policy actors. Thus, contemporary public administration has undergone a general decentralization and has delegated the authority to govern, motivated by both New Public Management (NPM) ideas and ideas on the enhancement of participation of actors and networks in the public sector. These transformations of the state have brought a relevant concern on metagovernance, on how to strengthen the government strategic capacities to coordinate public polices and to confront its loss of political control, as on all the important matters of democratic governance. However, the debate on governance in Latin America had different characteristics from the European one. In this process, the international financial institutions (IFIs) have played a central role to transfer the notion of good governance to Latin America countries, as an instrument to promote economic reform -within the neo-liberal economic development paradigm - and as a condition of international aid. In this context, the market governance as a (public) governance style was promoted. The focus has been on the belief of NGP, with the incorporation of efficiency principles, procedures and measures from the private sector, and market mechanisms, all of which lead to a better performance of public administration.1

E-mail address: [email protected]. For a more detailed analysis of the principles of the NPM see Osborne, David and Ted Gaebler (1992): Reinventing government: how the entrepreneurial spirit is transforming the public sector. Reading, Mass.:Addison Westley Peter Aucoin, ‘‘Administrative Reform in Public Management: Paradigms, Principles, Paradoxes and Pendulums’’, Governance, Vol. 3, No. 2, (1990), pp. 115–137. Christopher Hood, ‘‘A Public Management for All Seasons’’, Public Administration vol. 69, No.1 (1991), pp. 3–19. Christopher Pollitt & Geert Bouckaert, Public Management Reform. A Comparative Analysis (Oxford University Press, 2000). Michael, Barzelay, The New Public Management. Improving Research and Policy Dialog (University of California Press, 2001). 1

http://dx.doi.org/10.1016/j.polsoc.2014.10.004 1449-4035/# 2014 Policy and Society Associates (APSS). Elsevier Ltd. All rights reserved.

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Table 1 Main conflicts. Geographical space

Company

Start

Exit

Regulating institution

Indep

Provincia Tucuma´n, Argentina Provincia de Mendoza, Argentina Provincia de Santa Fe´, Argentina Provincia de Bs.As., Argentina Capital Federal y 17 partidos de Bs.As. Argentina Ciudad de Co´rdoba, Argentina Estado Mongas, Venezuela Estado de Lara, Venezuela Zona del Este Maldonado, Uruguay Zona Oeste de Maldonado, Uruguay La Paz y el Alto, Bolivia Cochabamba, Bolivia VI, VII y VIII Regiones, Chile

Aguas del Aconquija S.A. (CGE) OSM (Azurix Mendosa S.A.) Aguas Prov. de Santa Fe´ S.A. (Suez/AGBAR) OSBA Azuriz Buenos Aires S.A. Aguas Argentinas S.A. (Suez/ABGAR)

July-95 June-98 December-95 June-99 March-93

October-98 January-04 February-06 March-02 March-06

ERSACT(1995) EPAS (1993) ENRESS (1995) ETOSS (1992) ETOSS (1992)

No No No No No

Aguas Cordobesas S.A. (SUEZ/ABGAR) Aguas de Monagas S.A. (FCC) HIDRO LARA (Aguas de Valencia) Urargua S.A. (Aguas de Bilbao) Aguas de la Costa S.A. (ABGAR) Aguas del Illimani S.A. (SUEZ) Aguas del Tunari S.A. (Bechtel) Essbio S.A. y Aguas Nuevo Sur Maule S.A. Thalmes Water ESVAL (Anglan Water)

May-97 March-97 April-99 Jule-00 September-93 August-97 November-99 March-00

December-06 March-01 December-02 October-05 March-06 December-07 April-00 February-06

ERSEP (2001) SNSA (2001) SNSA (2001) URSEA (2002) URSEA (2002) SISAB (1999) SISAB (1999) SISS (1990)

No No No No No No No Si

April-99

November-03 SISS (1990)

V Regio´n, Chile

Si

Source: By the author based on BID (2007) and OECD (2008).

In this context, this paper aims to provide a critical revision of the agenda proposed for the transformation of the states in Latin America, specifically the dogmatic way to transfer governance recommendations from international agencies and to analyze the reforms undertaken and the main unresolved challenges (Table 1). In order to analyze these transformations, this article presents, firstly, how market governance tools are disseminated by multilateral organizations and the distinctive historical characteristics of the State in America Latina. Secondly, it introduces a theoretical review of governance as an analytical tool to study the hybrid modes of governance. Thirdly, it evaluates one specific case study on public policies of essential areas of the state reforms, such as public services privatization, in water and sanitarian services. This will allow to understand the tension generated inside the State by particular patterns of governance developed in the region and the unresolved problems. Finally, the article concludes with a brief consideration on the topics that may become important for academic research in the near future.

2. The relevance of market governance In Latin America, the academic debate on governance has been limited and its dominant notion was disseminated by the IFIs. The World Bank (WB), the United Nations Development Program (UNDP) and the Inter American Development Bank (IADB) have played a key role in the transference of the notion of good governance, thus pretending to improve the effectiveness of the international aid in under-developed countries (Grindle, 2007; Weiss, 2000). The WB defines good governance as the manner in which power is exercised in the management of a country’s economic and social resources for development. In this context, good governance refers to transparency and efficacy in three fundamental areas: (1) the method of electing, controlling and replacing authorities (institutional stability); (2) the government capacity to manage resources and applying policies (regulatory framework and government efficacy); and (3) the respect to citizens (transparency, participation, openness, human rights and the rule of law) (World Bank, 1992, 2006).2 2 The UNDP (1997: 12) defines governance as ‘the exercise of political, economic and administrative authority in the management of a country’s affairs at all levels. It comprises the mechanisms, processes, relationships and institutions through which citizens and groups articulate their interests, exercise their rights and obligations and mediate their differences’. From this point of view, an adequate governance is ‘participatory, transparent (...) with public control (...) effective and equitable (...) promoting the rule of law’ and ‘ensures that political, social and economic priorities are based on a wide consensus in the society’.

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Beyond this normative definition of good governance, the most relevant aspect to emphasize is that the dominant public governance style recommended for the countries of the region is the market governance. In the 1980s, the multilateral agencies recommendations converge on the need to reduce the state.3 In the short term, ‘‘privatization and greater reliance on market mechanisms reduce the amount both of direct state monitoring and of information about the production process. The decrease in current government spending also reduces resources available for planning.’’4 However, toward the middle of the 1990s, there was a turning point in the international debate. The verification of a poor performance of the development countries in the production system and the increase of poverty and inequality which this new paradigm brought with it, led to the thought of restructuring the State and reformulating its role in society. Studies by Peter Evans5 and by the WB itself, based on the theoretic contributions of Joseph Stiglitz6 – its vice president at the time, who suggested the need for improving the capacities of the states in order to build a sound market economy, taking Southeast Asia’s miracle as a precedent. In this context, the WB Report for 1997 ‘‘The State in a Changing World’’ marked a milestone when it raised the reform of the State as a key item in the new agenda for development. The Report begins with a categorical statement: ‘‘Certainly, state dominated development has failed, but so has stateless development. . . Without an effective state, sustainable development is impossible’’. The Report underlines the vital importance of governmental institutions and political stability in order to achieve a successful economic development in the long run and, particularly, for the regulation of the markets.7 An effective state is needed to provide the goods and services – and the rules and institutions – that allow markets to flourish and to improve the standard of living. Thus, the State is central to economic and social development, not as a direct provider of services but as a partner, catalyst and facilitator. This leads to a two-part strategy, a dual focus: on service (market thinking) and on accountability (hierarchical thinking). On one hand, it is necessary to build a selective State, focused on five core tasks without which it is impossible to achieve sustainable development and the reduction of poverty: establishing respect for the laws; maintaining a nondistortionary environment for creating and implementing policy, including macroeconomic stability; investing in basic social services and infrastructure; protecting the more vulnerable groups; protecting the environment. The second aspect of the strategy defined by the WB consists in promoting a ‘‘more capable’’ State through effective rules and restraints which check arbitrary actions and combat entrenched corruption. In order to carry out this objective, the WB recommends a series of transformations. First, the State must define its functions precisely and allow the market to assume a greater role. Concurrently, it must increase the participation of the private sector in activities which until then were reserved to the public sector with the understanding that state monopoly in topics of infrastructure, social services and other goods and services tends to be ineffective. As a complement, it is suggested the need to strengthen state or institutional capacity. The State must guarantee the observance of its laws – and do it in a way which is transparent and corruption-free – as well as civil society participation. The objective is to subject government institutions to greater competition from the market in order to increase their capability and efficiency, thus substituting the hierarchical bureaucratic model with a different one known as NPM. In other words, it recommends a market governance style in which the State must stop being a direct provider and become a facilitator, a mediator between the actors in the complex matrix of delivery of public services. In this context,

3 See John Williamson, ‘‘The Progress of Policy Reform in Latin America Policy Analyses’’ International Economics, Number 28, Washington: Institute for International Economics, January 1990. 4 Thomas J. Biersteker, ‘‘Reducing the Role of the State in the Economy: A Conceptual Exploration of IMF and World Bank Prescriptions’’, in International Studies Quarterly, vol. 34, 1990, p. 480. 5 See Theda Skocpol, ‘‘Bringing the State Back In: Strategies of Analysis in Current Research’’, in Peter Evans, Dietrich Rueschemeyer & Theda Skocpol (eds), Bringing the State Back In (Cambridge University Press, 1985), pp. 35–7; Peter Evans, ‘‘The State as Problem and Solution: Predation, Embedded Autonomy and Structural Change’’, en Stephen Haggard & Robert Kaufman (eds), The Politics of Economic Adjustment. International Constraints, Distributive Justice and the State, (Princeton University Press, 1992); Peter Evans, Embedded Autonomy: States and Industrial Transformation (Princeton University Press, 1995). Amsden, A. Why Isn’t the Whole World Experimenting with the East Asian Model to Develop? Review of the East Asian Miracles’’, World Development 22(4):627–633. (1994) (7pp) Amsden, A. (2004) La sustitucio´n de importaciones en las industrias de alta tecnologı´a: Prebisch renace en Asia, Revista de la CEPAL 82(75–90). (15pp). Wade, R. and F. Vernoso (1998) the East Asian Crisis: The High Debt Model vs. the Wall Street Treasury IMF Complex’, New Left Review 228(.): 3–23. (20pp). 6 See Josephn Stiglitz, ‘‘More Instruments and Broader Goals: Moving Toward the Post-Washington Consensus’’, in Gudrun KochendorferLucius y Boris Pleskovic (eds., Development Issues in the 21st Century, (German Foundation for International Development 1999). 7 See Banco Mundial, Informe sobre desarrollo humano 1997. El Estado en un mundo en transformacio´n, Oxford University Press, 1997, p. 4.

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the State’s regulatory capacity must be improved by encouraging the activity of markets. To this end operating rules and specific regulations (ad hoc, not Keynesian ones) must be established. This will generate an adequate framework within which the actors responsible for providing public services will operate. 2.1. The institutional and culture context of Latin America In Latin America, the market governance patters impact on a particular socio-political context. The region has experienced a double process of transformation, through a series of changes associated to the political regime’s democratization followed by changes in the socio-economic model. A first relevant change in the 1980s was the transition from an authoritarian regime to a democratic one that, besides transforming the electoral system structure through different government levels, also changed the relations between state and society. Not only was the democratization process related to the implementation of a competitive electoral environment, but it also was associated to new patters of the citizens’ participation in the public policies. Moreover, there were attempts to break with the old institutions of corporatism and patronage that involved corruption. In this new context, an activation of the social movements took place and helped to increase the citizens’ awareness and concern on governmental matters. Secondly, the region suffered the transformation from a development model centered on the state to one dominated by the market governance. This set of state reforms carried out in the late 1980s was also called ‘‘first generation reforms’’. Their emphasis was placed on deregulating and reducing the public expenditure as well as the size and intervention of the state on economy and society.8 Later, in the early 1990s, after facing the limited results achieved, the ‘‘second generation reforms’’ were promoted. The need to strengthen the state capacities and generate efficient institutions to enable the markets operation was clearly raised although the neoliberal approach was preserved.9 These reforms prompted dramatic changes in the relative importance of the State, whose scope of action was reduced because of deregulation, massive privatizations and the reduction of public investments and expenditure, providing more opportunities for the participation of private operators. However, the reforms oriented toward improving effectiveness and efficiency did not produce the expected outcomes. The dispersion, poor coordination, absence of controls and lack of evaluation had a negative impact on the quality of public policies. In the current millennium, the region is going through a ‘‘return of the State’’, associated with neo-structuralism (or post-neoliberalism) and the rise of the New Left (Riggirozzi and Pla, 2012), with a distinctly innovative discourse, such as national growth aspirations focused on welfare and citizenship and in building State capacity for national development. Consequently, the State appears as more visible and active in public policy (Almeida & Johnston, 2006, p. 7). This leaves us to wonder about the destiny of the various dynamics of social participation in the reorientation of the political process and about the new links they might establish with the State.10 This situation prompts some questions: Why was a radical reform of the State – much needed to return to the path of development – not carried out? Was the initial diagnosis mistaken? Were the recommendations inadequate?. Although the process was influenced by several factors, the main hypothesis is that the recommendations for reforms failed to emphasize the political aspect – that is, the rules of the political system – or the weaknesses of the political and institutional democratic framework. This placed limits on the transformation process and did not help to generate consistent, coherent and long-term reforms. To understand the limitations of the introduction of new pattern of governance in Latin America, it is necessary to begin by establishing the prevailing rules of the game and unveiling the political and institutional matrix produced by the historical background. 8

The debate about the State was centered on to what extent it should be reduced or dismantled in order to guarantee and foster a greater and speedier economic growth. In the 1980s, Margaret Thatcher’s government in Great Britain and Ronald Reagan’s administration in the United States were the starting point of a this new paradigm which became hegemonic. In Latin America, the neoliberal model was predominant in the government of Carlos Salinas de Gortari (Mexico, 1988), Carlos Menem (Argentina, 1989), Carlos Andre´s Pe´rez (Venezuela, 1989) and Alberto Fujimori (Peru, 1990). Its most successful example was Chile, with the reform wave that began during Augusto Pinochet’s dictatorship. 9 See Stephen Haggard & Robert Kaufman: The Political Economy of Democratic Transitions, Princeton (Princeton University Press, 1995). Moise´s, Naı´m, ‘‘Latin America: The Second Stage of Reform’’, in Larry Diamond & Marc F. Plattner (Eds), Economic Reform and Democracy (Hopkins University Press, 1995); Moise´s, Naı´m, ‘‘Washington Consensus or Washington Confusion?’’ Foreign Policy No. 92 (2000), pp. 87–103. 10 In spite of a shared concern for social inequality and opposition to the Washington Consensus, their governments pursued dramatically different economic policies.-

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This analysis should have as its starting-point a basic but often forgotten premise: the existence of a democratic political and institutional framework. A democratic system is institutionalized and works thanks to a State which abides by the rule of law, which implies the rule of law as an expression of the general will, the division of powers and the legality of administration, particularly through control and accountability systems. Citizens’ rights are guaranteed not only by elections (vertical control) but also by checks to power itself (horizontal control) which is possible thanks to the division of powers. This balance is essential to democracy and requires intense communication with the society. Therefore, the rules and mechanisms for representation, legitimation and accountability influence on how a society is governed and the form to solve its current problems. Although most countries in Latin America have incorporated the basic democratic principles of the rule of law into their constitutions and have organized their bureaucracies according to the weberian form. Nonetheless, this is not complied with as far as practice is concerned. Historically, the Latin American States have been organized around political parties or fractions, that is, complex networks of related particularism11 and corporate interests. In this type of political system, the mechanisms for processing demands, solving conflicts and distributing resources and power, were oriented toward satisfying particular interests of individuals or groups, not the public good. Particularism does not imply a logic of State action as an apparatus, it rather responds to the logic of interests and legitimacy of the political parties with respect to the society. If the mechanisms for building loyalties within the political parties are not universalist and programmatic but of the kind based on retribution, then the state reform in a managerial or truly Weberian sense will not be easily accepted. Specifically, one can see the persistence of a ‘‘deep structure’’ of relationships based on the logic of patrimonial systems of control and power generation. Patrimonial logic in the region is embedded in a social structure organized around diffuse vertical hierarchies of patron-client networks (Chalmers, 1977). This underlying control pattern and its attendant patrimonial logic clashes with and tends to undermine the manifested rational legal principles of control and rule articulated in the region’s history of constitutional engineering. The interaction of these two logics of control and power generation under some circumstances do in fact generate power, but in others offset each other and debilitate states. In order to understand the transfer of market governance recommendations from international agencies and the impact on the prevalent form of government, the governance approach provides an analytical tool to study the hybrid modes of governance and gives insight about the relation between State, market and civil society. This can contribute to understand the inherent incompatibilities of governance styles as well as the nature of the framed (policy) problems in relation to the political, institutional and societal context. In other words, this helps to understand how the neoliberal reforms impact on the current transformation, the permanence of particularis rules and the new capabilities needed in the new millennium. 3. Theoretical review of governance The term governance is mostly used to indicate a new mode of governing, different from the old hierarchical model in which state authorities exert sovereign control over the people and groups making up the civil society (Mayntz, 1993). Governance refers to a basically nonhierarchical mode of governing, where non-state, social and private corporate actors participate in the formulation and implementation of public policy.12 The most recent literature has been the attempt to differentiate the concept of ‘‘governance’’ from ‘‘interactive governance. The concept of ‘‘interactive governance’’, as a mode of governance, is reserved to characterize ‘‘the complex process through which a plurality of actors with divergent interests interact in order to formulate, promote, and achieve common objectives by 11 By ‘‘particularism’’ we refer to ‘‘various sorts of non-universalistic relationships, ranging from hierarchical particularistic exchanges, patronage, nepotism, favors and advantages to actions that, under the formal rules of the institutional package of polyarchy, would be considered corrupt’’. See Guillermo O’Donnell: Contrapuntos. Ensayos escogidos sobre autoritarismo y democratizacio´n, Paido´s, Buenos Aires, 1997. 12 The European debate in governance starting in the 1990s, a first generation of governance network research explained how this form could be distinguished from hierarchical and market approaches and analyzed how and under what conditions it contributed to the production of effective governance (Marin & Mayntz, 1991, He´ritier, 1993; Mayntz, 1994, 1993; Schapf 1994). Recently, a second generation of research has examined what are the instruments of governance networks to facilitate collective decision making, how can public authorities through different kinds of metagovernance regulate self-regulating governance networks and the democratic problems and potential of governance networks (Benz and Papadopolous, 2006; Klijn and Skelcher, 2007, Sorensen and Torfing, 2009, Skelcher et. al., 2011, Torfing et al., 2012).

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means of mobilizing, exchanging and development of ideas, rules and resources’’ (Torfing, Peters, Pierre, & Sørenson, 2012). However, in a narrow governance definition, it is not possible to include the historical form of governance and the market governance introduced more recently in the region. Only a broad definition of governance offers an analytic framework to explain the way in which we organize our societies and the interaction among government, market and civil society, in a particular political and cultural background. Governance can be defined as the totality of interactions, in which government, private sector and civil society’s actors aim to solve societal problems or create new opportunities in society (Pierre & Peters, 2000). Although many governance styles have been distinguished, they are usually grouped into three ‘ideal-types’ of governance, which define the roles and lines of responsibility of public-sector, market and social players in different ways: hierarchical, market and networks. Indeed, the debates over the impact of hierarchy, markets and networks have given rise to a related concept of metagovernance.13 The literature is diverse but there is a broad agreement that it refers to ‘the governance of governance’, defined by Jessop (2014, p. 70) as the organization of the conditions for governance (involving) the judicious mixing of market, hierarchy, and networks to achieve the best possible outcomes. In other words, the transformations of the state have brought a relevant concern on how to strengthen the government strategic capacities to achieve collective goals through the mobilization of the resources and power of the non-governmental actors, in order to confront its loss of political control, as well as the all-important matters of democratic governance (Peters, 2011).14 In this sense, metagovernance would see as a process that takes place within and, in large part, is shaped by, the broader power relations and can reflect the patterns of structural inequality in society. Historically, in Latin America has prevailed a hierarchical form of governance, but with characteristics different from those in Europe. In the late 80 and early 90, market governance was introduced (private sector instruments and procedures: NPM). At the same time, the demands of democratic opening in Latin America led to the creation of mechanisms for promoting greater citizen participation. These spaces are further promoted in the 21st century by left governments. The creation of new forms of networks governance-institutionalized ‘‘interfaces’’ for contact between government and civil society – are generally viewed as mechanisms for increasing governmental responsiveness, transparency and accountability, at the same time that they subvert the elitism and hierarchy of clientelism (and, perhaps, representative democracy more generally) (Cunill, 1995, Cheresky and Pousadela, 2001, Dagnino, Olvera, & Panfichi, 2006). However, new studies in the region state that the existence of the interface of participation is not necessarily more horizontal and inclusive. The local councils can be captured by local clientelistic hierarchies (Zaremberg, 2012).15 It is important to note, that governance has obviously described an ideal policy and an ideal society. In fact, the concept of governance has a distinctly normative flavor. Effective governance can only emerge in societies that meet certain institutional and structural preconditions, as a new and effective way of political steering. First, political authorities must be democratically legitimated and assumed to act in the interest of all rather than in the interest of a dominant class or political party. In other words, they must the guardians of public welfare. The second essential precondition is the existence of a well organized civil society. Finally, there must exist among the different social group a minimal sense of identification with a common national identity. But different societal interests -particularly in Latin America- are unequally represented. Interest groups often lack the necessary minimum of public spirit, politicians are more interested in maintaining power than in public welfare, and state authorities are too weak to discipline the powerful of particularist interest groups. This aspect should be

13 See Baker and Stoker (2012), Bell and Hindmoor (2009), Jessop (2004), 2011, Delenbos and Klijn (2006), Kooiman and Jentoft (2009), Meuleman (2009), Sørensen (2006), Sørensen and Torfing (2006), Torfing et al. (2012), chapter 7; Torfing et al., 2012). 14 The new instruments are based in processes of negotiation and agreements to reach policy objectives that do not require the compliance with legal restrictions. Instead, they establish goals and formal standards. New contributions focus on the strategic conduction, setting political priorities; to indirect and soft conduction, in which political leaders align actors involved in the elaboration and planning of public policy to government objectives (soft steering); to the maintaining control of the most relevant processes while leaving some spaces of autonomy (golden thread); and to strengthen the mechanism of accountability of the government agenda (Peters, 2011; Torfing et al., 2012). 15 For example, see differences in Hawkins and Hansen (2006), Garcı´a Guadilla (2007), Lo´pez Maya (2009) and Arenas (2008) for Venezuela Fox (2007) and Gutman (2007) for Oaxaca, Me´xico. For Nicaragua see differences between Borchgrevink (2006) and Largaespada (2008).

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particularly considered to understand the particular patter of governance in the region and the causes of the main unresolved challenges. In order to understand the tension generated inside the State, it is necessary a broad interpretation of governance, including the interaction of different styles of governance. For this propose the case study of privatization of water services will be hereafter analyzed, which will provide an insight of the tension of the reforms undertaken and the main unresolved challenges. 4. Water governance In Latin America, privatization flourished in the 1980s and 1990s as a result of international liberal measures recommendation. Public resources, including telecommunications, water and transport, were sold off to the private sector more rapidly than in almost any part of the world. One among the many experiences in this direction was the privatization of water and sanitation services. In this process, the international community had played significant and far-reaching policy initiatives to overcome the deficiencies and inequalities in the allocation and distribution of water for essential human use in developing countries.16 The most important initiative in this area were the United Nations’ Millennium Development Goals (MDGs),17 which represent a global agreement reached at world summits, and are related with the water sector by way of poverty-reduction, environmental sustainability and development through the promotion of concerted global strategies (Castro, 2008, Phumpiu & Gustafsson, 2009). Considering the recommendations of the International community and the GDMs, market governance is suggested as an alternative tool to reach a substantial improvement in water services. It was generally accepted that it is not possible to reach an efficient management with the governmental institutions as a unique actor, especially when they lack an effective organization and depend on political-parties logics. Therefore, the Public–Private Partnerships (PPP) which includes particularly the private sector is the most efficient, effective and as well as democratic ways to manage public services (Banco Mundial, 2006; Furlong, 2010; Holland, 2005; Hall, Lobina, & de la Motte, 2005; Parker, Kirkpatrick, & Figueira-Theodorakopoulou, 2005; Phumpiu & Gustafsson, 2009).18 In this scenario, an important process of water services privatization and decentralization to local or municipal authorities and private companies took place in the region.19 What is more, new institutions and organizations were created in many Latin American countries in order to regulate and monitor the private sector, sharing the principles of their peers in the United States, United Kingdom and France (Page & Bakker, 2005). First, it was necessary to modify either the legislation or the Constitution to allow the participation of the private sector, as well as a series of norms designed to attract foreign investment. The Code for Waters (1992) in Argentina, the Law of National Waters (1992) in Mexico, a special policy for the sector in Colombia (1994), the Framework Law on Waters (2003) in Honduras, were just some among the many examples. At the same time it was necessary to create regulatory agencies with the objective of regulating the sector (Alexander, 2005; IADB, 2007; OECD, 2008). This permitted the creation of a water market which defined water as an economic good and not a public good or a property of the nation (Castro, 2007; Hall et al., 2005; Jime´nez & Pe´rez-Foguet, 2009). Second, many Latin American countries established a regulatory offices in the early 1990s to oversee the private participation. In these countries two forms of institutional oversight were established: (1) a sector wide policy making and monitoring (through a federal water commission or board, water law, ministry of environment)

16 For a synthesis of the main international initiatives since the 1970s, see ‘‘MILESTONES 1972–2003: from Stockholm to Kyoto’’ at UNESCO’s Water Portal, jttp://www.unesco.org/water/wwap/milestones/index.shtml) 17 One of the Millennium Development goals of the United Nations is to "Reduce by half the proportion of people without sustainable access to drinking water by 2015." 18 This recommendation took part in a neoliberal paradigm, and expressed the necessity to create a water market in the region, with a growth of private property right, liberalization, deregulation and re-regulation, public-private associations, decentralization and citizen participation as an accountability mechanism. 19 In Latin America, the dominant form was the privatization of services – complete sell, including the sell of assets- and various ways of contracts to operate, maintain and/or build infrastructure The dominant contractual mechanism was COT (construction, operation, transfer) and its variants. In the Chilean case it was disinvestment, in which the govern transfers exploitation rights to the private sector through 30-years concessions, but not the ownership of actives (BID, 2007).

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(2) an economic regulation of service provision (through a national regulatory agency o several sub-national entities) (OECD, 2008). However, these changes in the management patterns have not had the expected outputs,20 investment has declined, services provision has not been sufficient and it has not achieved the international normative in terms of quality, quantity and democratic access (Caldero´n and Serve´n, 2004; OECD, 2008).21 On the other hand, only the private sector was considered a leading actor in the public services provision whereas the civil society was not particularly involved in this matter. In the current century, most international operators have left the region, a number of services have been nationalized and regulating institutions have stopped exercising their functions (IADB, 2007). In order to understand the limited results of the reforms it is necessary to analyze some of the most important cases. They exemplify the conflicts and tensions that emerged around the privatization of these services and the deeper political and institutional weaknesses (Guasch, 2004). 5. Dilemmas and tensions in market water governance The most emblematic conflicts took place in Bolivia and Argentina. In Bolivia, private sector participation in water services faced strong protests from consumers, who demanded a revision of the contract awarding procedures. The most extreme cases took place in Cochabamba and El Alto/La Paz, where the international corporation ‘‘Aguas del Tunari’’ imposed a 35% fee hike which triggered a broad popular uprising. The ‘‘Coordinadora Departamental por la Defensa del Agua y la Vida’’ organized a massive protest, which culminated in a general strike and led to riots causing injured civilians and police officers, in 2004 and 2005. Finally, in 2007, the corporation transferred its company to the State, which led to the creation of a new State-owned corporation (IADB, 2007). In Argentina, a serious conflict arose in the province of Tucuma´n in 1995, when the contractor increased fees by a 106%, which sparked protests from consumers, who refused to pay. At the same time, the new provincial authorities encouraged ‘‘non payment’’ of bills, which led to the withdrawal of the company. In the Santa Fe, Co´rdoba and Buenos Aires provinces, the exit of the international operator was due to economic and financial imbalances.22 The economic crisis and the freezing of fees imposed by the Public Emergency Law (2002) increased costs and lead to a broad process of renegotiations and contract infringements. The new authorities that came into power in 2002 hardened the government’s position and instructed the regulating institutions to fine contractors, who responded by resorting to the international arbitration of the International Center for Settlement of Investment Disputes (ICSID). In 2006, the contracts were rescinded and the services transferred to State-owned companies, except in Co´rdoba, where the stock owned by the international partners was sold to a local investment group (IADB, 2007). In Bahı´a Blanca the absence of a guarantee of access to water services led to citizen mobilization. This led to the company not getting a credit from multilateral banking and this not being able to cope with promised investments. In 2001, the company goes bankrupt and sues before an international tribunal, which ruled in its favors establishing and indemnization of US$ 165 million, which is being appealed by the government. The service was reassumed by a new provincial public company. In the Uruguayan case, there was a deep social discontent with the poor quality and the high rates,23 which led to the creation of the National Commission for the Defense of Water and Life (2001). Along with a broad citizen participation, it achieved, through a referendum in 2004, the approval of a constitutional reform which prohibited the private management of water and sewerage services. Shortly afterward, the left-wing government that took power 20 Most of the investment came from the public sector and international institutions, not the private sector. For more information see the World Bank database http://ppi.worldbank.org/. Regarding reach, companies focused on the most lucrative areas, which are with populations over 500,000 inhabitants, and refusing to extend services to poor neighborhoods (Furlong, 2010). 21 We should mention some successful local experiences, but having in mind that their impact was limited because of the lack of appropriate regulatory frameworks (Soto, 2001; Zadek, 2004: 12–13), some examples are Puerto Corte´s (Honduras), Saltillo (Me´xico), and Recife, Cartagena and Porto Alegre (Brasil) (Holland, 2005). 22 Similar situation was in Mexico. In 1995 y 2005 respectively, contracts in Aguascalientes and Cancu´n in Me´xico suffered a severe setback due to the economic crisis. In these cases, the Mexican National Bank bailed contractors out. 23 If we compare fares of the State-owned company OSE y and the private Aguas de la Costa, we find that the fixed rate for water was 7 times greater, the fixed rate for sewerage was 40 times greater, the cost of water connection was 16 times greater and the sewerage connection 80 times greater.

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managed a quick departure of the two international operators, who were blamed for rate hikes, contract infringements, lack of investment and bad quality services. These conflicts showed how weak State and public bureaucracies were when it came to exercising functions of regulation, be it through established competent institutions or by regulating institutions created for this end. The main problems can be summarizes as: High rates (Tucuma´n, Cochabamba, the Buenos Aires Province and Aguas de la Costa SA in Uruguay); Lack of access by low-income families (Buenos Aires and it’s outskirts, the Santa Fe Province, La Paz, El Alto and Aguas de la Costa SA in Uruguay); Bad quality services (Bahia Blanca); A disregard for rules that forced a constant contract renegotiations between the contractors and the government (Buenos Aires and it’s outskirts and the Santa Fe Province). 6. Market governance and the weak State The above mentioned conflicts were symptoms of deeper politico-institutional weaknesses. The cases shows the difficulties of contracting with big international corporations, which made it impossible to guarantee an efficient quality service because of the lack of feasible and sustainable studies, poorly designed tendering procedures, juridically deficient contracts, weak purchase and contract control, limited access to information and lack of accountability. Sanctions were slow and insufficient, and contract renegotiations inefficient, either because of information asymmetry issues or because of the capture of the regulating institution. In general terms, there was an absence of a regulatory system that could limit arbitrary decisions (CEO, 2005; Hall et al., 2005; IADB, 2007; OECD, 2008), and perhaps more importantly, defend the public good. In some countries, a federal regulatory authority was established with the function of reviewing and approving fees, monitoring and enforcing standards of performance, awarding concessions, and, to a varying degree, imposing sanction. Nevertheless, the sole act of establishing a regulatory agency does no help to clarify institutional responsibilities. In Honduras, Bolivia and Peru, the political and administrative inexperience has constrained the effectiveness of the institutional arrangement. In Brazil and Mexico the regulatory agency is also the service provider, creating a conflict of interest for regulators. In contrast, in other countries like Argentina and Brazil the regulation of services was delegate to the state, because of limited administrative, technical and financial resources of these regulatory agencies (OECD, 2008). In many countries, the sector still characterized by an unclear allocation of responsibilities across public and private partners and multiplicity of government agencies responsible for the implementation and oversight has led to a dilution of responsibility and unclear reference point for private actor (OECD, 2008). Water provision services in most Latin American countries have not had the expected results under these patterns of regulatory governance. The transference of these new ways of management has been done without considering the political-institutional context of the region’s countries. The paradox was that governments tried to create an independent regulator insulated from the political pressure. In practice, it was not possible. Different studies show that few of the regulators managed to collect and monitor information and to apply penalties independent from the political pressure. Moreover, a relevant survey of the experience with infrastructure regulation in developing countries concluded that most of the newest regulatory agencies are not independent of government and are not insulated from political control (Kessides citado por CLARKE etc. 2009, 331) Among the weaknesses, to be mentioned are: the absence of an institutional framework, inefficiencies of the legal systems and planning, scarce availability of resources, absence of a regulatory system that limits arbitrary decisions and increases the system’s credibility, weak capacity of regulation and control of purchases and contracts with the sector’s companies, limited access to information and weak capacity of evaluation, monitoring and accountability (CEO, 2005; Hall et al., 2005; OECD, 2008). However, the most important aspect of the international recommendation is the de-politicization debate about the water governance. In general, cultural practices of water management were not taken into consideration in national lawmaking; society was portrayed as homogenous, with no room for differing water rights or forms of water governance. Water policies and laws often assumed that simply adopting official legal norms would work to shape and standardize the multi-faceted reality of water management, creating a ‘‘modern’’, ‘‘efficient’’ and ‘‘rational’’ management system. In general, a weak performance of the State is verified in its role of steer the efforts for the society’s welfare and adequating public-private associations for water services.Community management of water network governance an alternative model? ?

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In the current millennium, the region is going through a ‘‘return of the State’’, associated with neo-structuralism (or post-neoliberalism) and the rise of the New Left (Riggirozzi and Pla, 2012), with a distinctly innovative discourse, such as national growth aspirations focused on welfare and citizenship and in building State capacity for national development. Thus, this leaves us to wonder about the destiny of the various dynamics of social participation. In this context, there has been a process of re-statization of services. Neither the private companies nor State-owned ones manage to can completely cover citizen demands when it comes to water-related services. As a consequence of this situation, most of the poor communities have built their own water services, supplied by wells that are managed by independent coo-ops, informal committees or locally elected councils. In Latin America, It has been identified three participatory management models: Community Organizations for Water and Sanitation Services (OCSAS), the ‘‘Un millo´n de cisternas rurales
(P1MC)’’ program in the Brazilian Semi-Arid Region and the lawsuit in the Matanza-Riachuelo basin24 in Buenos Aires, Argentina. OCSAS, also called Water Co-ops, this Water Committees are social structures created by local groups in periurban or rural zones that are generally not reached by State-owned, private or mixed companies that serve major cities. They are by no means a new phenomenon, and date back to 35 years in Central America and 30 years in South American countries. According to World Bank data, 80.000 of them exist in Latin America, providing water to over 40 million people. In Central American, Andean and other countries of the region, between 30 and 40% of the population is served by this kind of communal organizations. Through self-government statutes, cooperative work and democratic election of its leadership, these organizations focuses their efforts in establishing systems of capturing, purification distribution and payment. They vary in size25 and in the services offered, as well as in the legal frameworks in which they operate. In Ecuador, communal management is recognized by the National Constitution. In Paraguay, laws and norms enable a State institution to create OCSAS. In other countries, such as El Salvador, efforts to update the legislation that regulates communal water management have not yet been successful. In Nicaragua, in 2010, lobbying by organized citizens assembled in CAPs (Committees for Drinkable Water and Sewerage) achieved the passage of the ‘‘Special Law for Committees for Drinkable Water and Sewerage’’. A second model was detected in the Brazilian North-East, one of the continent’s most arid areas, where 36 million people currently reside. There, communities formed in 1999 an organization called Articulation in the Semi-arid (ASA) that manages the ‘‘Un millo´n de cisternas rurales’’ program, which consists in the installation of fiber-cement tanks designed to capture rainfall in rooftops. In 2010 alone, ASA built 322 tanks, which provided water for 1.6 million people. The third identified model is found in the Matanza-Riachuelo basin, in Buenos Aires, Argentina, where a group of civil society organizations26 sued before the Supreme Court of Justice to establish drinking water and sewerage. The Court ruled in their favor and through a series of constitutional mechanisms 1, 2 million people already enjoy the same quality service as the rest of the Buenos Aires population.27 Although many of these networks governance can considerer as successful, as the current cooperative of Cochabamba, Bolivia, the community management has its limitations. The experience of Saguapac and Cosmol shows that a well-run cooperative can provide a financially sustainable, high-quality water service that is accessible to lowincome consumers. It also indicates that an open, democratic and intensely participatory style of governance can prevent corruption and generate the consensus necessary to finance service improvements with local resources (Marston, 2012). Both Saguapac and Cosmol have succeeded by vigorously enforcing governance rules that insulate them from these political influences. But they have a mayor disadvantage when it comes to raising investment capital. Unfortunately, the experience of Saguapac and Cosmol is not typical. Nearly all of Bolivia’s urban water services are organized as cooperatives, and many of them are efficient, financially sound, or free from conflict. As Cosmol’s experience illustrates, the cooperative model does not automatically guarantee that a service will be efficient or free of corruption. 24

The basin is the most socially and environmentally vulnerable of the city of Buenos Aires and its suburbs. There are around 3.5 million inhabitants in the area (13% of the countries’ population). The population in villas de emergencia rises to half a million people. 25 http://ppi.worldbank.org/ 26 Small OCSAS provide to up to 500 families, mid-sized ones between 500 and 2000 and big ones can anage to provide for thousands of users. 27 Fundacio´n Ambiente y Recursos Naturales (FARN), Greenpeace, Centro de Estudios Legales y Sociales (CELS), Asociacio´n de Vecinos La Boca (AVLB) and Asociacio´n Ciudadana por los Derechos Humanos (ACDH).

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These community-led and participative water management systems have supporters in both the liberal camp and in those who oppose to neo-liberalization. On one hand, international financial institutions, after the failure of privatization, are promoting the ‘‘participation of the poor’’ in the supply of services (Ruckert, 2006). The WB recommends that political leaders and regulating institutions recognize the contribution that alternative providers make to the sector (Tre´molet & Hunt, 2006). On the other hand, those that promote community management see it as an alternative model, capable of facing local specificities in areas that were in many cases forgotten by the State, giving local residents a sense of empowering and ownership. A key concern is that it leaves the least favored with inferior quality services than the ones offered by either the State or the private sector (Bakker, 2008). Other researchers express their concern with the idealization of the ‘‘community’’ (McGranahan & Mulenga, 2009), while they warn that participatory processes can be complex and require time (Sabatier et al., 2005), may lack a sense of justice or be blocked by the lack of capital or political funds (Cooke & Kothari, 2001). Participatory outlooks can help to broaden services, but given the difficulties in raising capital, they can also lead to unstable systems. In general, a weak performance of the State is verified in its role of co-ordinating the efforts for the society’s welfare and adequating public-private associations for water and sanitation services. The topic of this research is the manageability of combinations of hierarchical governance, network governance and market governance, occurring inside 21st Century public-sector organizations.

7. Rethinking governance in Latin America The case study analyzed has discussed the tensions among hierarchical, network and market governance in the public sector and how it did not reach the expected results in terms of a more effective, efficient and democratic public policy. However, the three ways of governing pose a triple challenge to public managers: state, market and civil society. The market governance recommendations had the a greatest weakness in assuming that it could be transferred from one country or region to another in a dogmatic way, without considering the institutional capacities of the States, the historical processes, the particular characteristics of each country and the relationships of power. The dominant thinking was based on a restrictive view of the State, limited to the state apparatus and the public administration. These restrictive views of the reform proposals, focused exclusively on technical and administrative matters. As a consequence, the technical approach of governance was centered on instrumental aspects, reducing political problems to merely operational and procedural matters. Thus, the debate about policy objectives and the role of the State has shifted to a discussion about the tools for an adequate management of human, material and technological resources, in order to improve the information system or the internal management procedures. Although these aspects are relevant for attaining a better management, the confusion between management instruments or paradigms on one hand, and objectives and strategies for political reconstruction and management on the other, must be avoided. It emphasized the technical governance measures, but it did not consider the underlying power relations. The key issue is how the State acquires and exercises its authority for providing and managing public goods and services. The definition of public goods is not neutral; rather, it has different contents and implications according to the development of objectives fostered by each ruling group. The way in which a State manages resources and carries out policies is closely linked to the objectives of political action and the political and institutional environment. Specifically, market governance narrowed the problems of the State and institutional rebuilding to a merely technical matter. This had important consequences. First, the introduction of new governance patterns was reduced to administrative structures, processes and procedures, without an analysis of the agents of change, the actors and their interests, and the power struggles at stake. Second, it put forth the importance of institutions for development and underlined the key role of rules – whether formal or informal – but failed to make a clear definition of how institutions have an impact on reform. This means that it did not emphasize political feasibility as a necessary condition for carrying out a specific set of reforms. As a consequence, the formulation and implementation of this recommendation encountered serious difficulties. In order to carry out any reform process, it is important to consider the set of institutions that has established how power is exercised and state tasks are performed in Latin America. This leads to a study of the way demands are

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processed, conflicts resolved and public resources used in the political system. More specifically, the rules of the game must be accepted by the actors in the political realm. As a first step, the following questions must be considered in future research: What are the rules of the political game?28 Do democratic rules prevail? If not, which are the prevailing rules? Furthermore, it is important to analyze to what extent Latin America resembles this model and the consequences for the governance. In a democratic system the prevailing rules of the game establish a decision-making process which is responsive to the citizens’ concerns and needs. Therefore political decisions must be adjusted to the general interest. In order to get close to this ideal a society must institutionalize democratic practices, and this implies these rules must be known and accepted. In the case of conflicting interests, a new legislation will not suffice to produce an automatic change in the behavior of the actors involved. Yet in Latin America the prevailing rules of the game and the unveiling of political and institutional matrix produced by the historical background are not democratic. It is needed to grasp the power relations, the social embedding of patronage/clientelism, and the driving forces of corruption and the dynamics of exclusion. In this studied case, the process of water governance resembles a highly asymmetric and evolving structure where the actors tend to have dissimilar proportions of political power and knowledge. For this reason, water policies are designed and implemented disregarding for the values, opinions, and preferences of the citizens and in the absence of democratic governance arrangements. That explains the social and political conflicts around how water and essential water services should be governed within a given hierarchical distribution of places and functions (Castro, 2012, Swyngedouw, 2011). The institutional frameworks (legislation, agencies, etc.) were created to facilitate the participation of transnational capital in the provision of services, but not to ensure universal access to services, or to enforce respect for the rules. In the current millennium, the creation of new forms of networks governance- institutionalized ‘‘interfaces’’, as the cooperatives in the Water sector, for contact between government and civil society- are generally viewed as mechanisms for increasing governmental responsiveness, transparency and accountability. At the same time they subvert the elitism and hierarchy of clientelism (and, perhaps, representative democracy more generally) (Zaremberg, 2012). Contrary to what most of the literature maintains, these studies state that strengthening the civil society is not sufficient to make participatory processes more democratic. In order to become truly inclusive and plural it is necessary that they be reformed from below as well as from above. We need a strong society and a democratic State. In other words, the historical legacy is important in order to understand the governance patterns developed in Latin America. They are related to the type of state that was developed in the 20th Century: weak in guaranteeing the rule of law and holding a predominance of the vertical accountability over the horizontal one. In such a political system, the ways to process demands, solve conflicts, distribute public resources and power were oriented to satisfy the particular interests of individuals or groups instead of the public welfare. In this way, hierarchical logics of political patronage and a combination of clientelism and corporatism prevailed. State reform will not be successful without a reform of the ways of government and a revitalization of the active citizenry. In developed countries the debate about State reform should be centered on the need to make it more democratic and strengthen the accountability mechanisms. The basic idea is that updating and reinvigorating the State requires systematic efforts to change the way of doing things, new instruments and good practices, but it is also essential to consider political processes.

28 Institutions are the formal and informal rules of the game that prescribe the guidelines for relationships between the strategic actors involved in the public decision-making process and regulate the way in which demands are processed, conflicts solved and public resources allocated in the political system (regulatory role). They also provide a framework of stability, ensuring the constant repetition of certain behaviors by the agents of power and of all the activities related to it (normative role). Furthermore, this set of rules is a symbolic element that allows actors to interpret the world in which they live (cognitive role). Formal institutions depend on cultural elements: the rules and values of a society. Therefore, external powers are seriously limited in their ability to convey to developing countries the existing knowledge about institutional construction and reform. Cultural change takes time and in the short term it can only occur in microenvironments, in specific organizations: public institutions, community associations, etc. This is because institutions are never the result of an isolated act of will but rather of a complex process of social construction which is expressed and takes shape in laws, decrees or government resolutions. Therefore, institutions cannot be created or changed by decree. So the failure of administrative reform is often due to a focussing of efforts on formal changes – closing an office, creating a new one, introducing a new management procedure – without considering the political dimensions of that reform. In other words, how the strategic political actors, who are conditioned by the institutional framework, are not only able to articulate interests, resources and agenda in political decisions and in public action options, based on the prevailing institutional system, but also to transform it.

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A change of the development model – and of the corresponding State model – cannot be based on an instrumental logic. It involves a change actors, power, knowledge, abilities, roles, and value. When many of the recommendations for reform were implemented in Latin America, not enough importance was given to the crucial need for a change in behavior and in political culture in order to achieve a more transparent State, free from corruption and respectful to the rule of law. Nor was enough consideration given to the persistence of particularistic practices that are deeply embedded in Latin American societies. Its failure to consider the political dimension is possibly the greatest weakness. In its time, the report was useful as it focused debate on institutional quality, which led to studies stating that corruption, instability of the ‘‘rules of the game’’ and excessive bureaucracy are significant obstacles to the economic progress. It also contributed to the generation of empirical evidence about the importance of institutional factors in achieving good economic and social performances. Furthermore, the inclusion in research works of the cultural, social and historical characteristics of each country has met with significant methodological difficulties. Despite these efforts, there has not been enough research into the connection between institutions and development. The conceptual framework is insufficient for identifying which institutions are needed, the way in which they can be combined and how they can promote growth.

8. The remaining challenges State reform in Latin America is still in the agenda. Practically no Latin American countries have carried out reforms in a consistent manner, whether due to lack of political will or technical ability. Achieving a more efficient State and basically, a more democratic one, is a remaining challenge and it has two aims: making management more efficient and making it more democratic. This requires a deeper understanding of political processes and the way in which some political configurations influence the decision making and the quality of reforms. This calls for research with new analytical frameworks that allow investigating how State traditions, constitutional arrangements, bureaucratic structure and the political culture of Latin America – with its peculiarities and corporative and clientelistic forms – affect the administration of public policies. In order to understand the tension generated inside the State by particular patterns of governance in the region it is suggested to combine the governance approach and thea policy network theory as a conceptual and methodological framework that describes the complexity of linkages between actors in a political arena. This requires deepening the study on public policy arenas as a way to open the ‘‘black box’’ and incorporate new analytical frameworks that enrich the debate because it is through them that the State intervenes and transforms itself. The focus on public policy arenas though the policy network approach and governance theoretical contributions will allow us to have a vision of the state ‘‘in action.’’ In this regard, it becomes essential to compare the political arenas in different countries, where public policies are developed and implemented, where individuals or groups exert their influence on the policy in question and its impact on the institution that is built (Scharpf, 1997). It is necessary to research how the dynamics of the building of institutional and public space by actors in a political arena have changed, how they have affected the political and administrative arrangements, as well as how State functions and power relations has changed in the process (Scharpf, 1997). This will enable us to have a more polished analysis of State transformations, management formats, power relations and the achieved results. The policy network theory is an analytical tool that describes the complexity of linkages between actors in a political arena. This provides a perspective to analyze the complexity of the decision-making process generated by the variety of actors involved that interact to formulate, promote and achieve common goals in an institutional context. In order to explain how these networks of actors work, it is used an approach about the interplay between actor and structure (Hay, 1997, Scharpf, 1997). Although the ontological and epistemological differences between the different institutionalism variants, whereas the rationalist approaches are centered in the agent and the culturalists in the structure, it is possible to surpass these differences and to use complementary approaches. The actor-centered institutionalism is a relational approach between the agent and the structure for the analysis of public policies. Nevertheless, it is also necessary to consider that ‘‘the mid-level phenomenon cannot be explained isolated from broader political institutions’’ (Atkinson and Coleman, 1989: 67). Not only sector characteristics (patterns of interaction between actors) should be taken into account but also national political and administrative arrangements should be incorporated into the analysis. It is important to investigate to what extent State traditions, constitutional

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