The coexistence and the conflicts between the Regulatory State and the Entrepreneur State in Brazil

The Eletrobras Case

Abstract

Purpose ”“ This essay examines the Regulatory State and the Entrepreneur State, focusing on the needed separation of these functions, which can overlap and cause conflicts.

Methodology/approach/design ”“ The first section presents the characteristics of the different paradigms observed by the State during the years. The two following sections deal with the Regulatory and Entrepreneur States. After analyzing a case of conflict, the last section examines the need to separate the regulatory and entrepreneur functions.

Findings ”“ The exam of the Brazilian State evolution, which presents itself as a Regulatory State, but still has many characteristics of an Entrepreneur State, shows the need to separate clearly the functions, due to the risk of concrete conflicts and damage to the parties involved.

Practical implications ”“ The conclusion is essential because of the (still) expressive number of Brazilian state-owned companies and not only their economic relevance but also their importance in the effectiveness of collective interests, even with the development of the Regulatory State.

Originality/value ”“ The paper intends to fill a gap in the study of the relation between the Regulatory and Entrepreneur States. The reflections about both functions normally focus in the individual aspect. However, the complex reality demands a jointly exam of these State functions, their relation and the need to better limit their boundaries.