The effect of the regulation and regulatory enforcement on the implementation of the social tariff in the water sector: empirical evidence from Brazil

ABSTRACT The social tariff is a policy that provides water supply and sanitation services at affordable prices for financially vulnerable households. A state regulatory agency of the Brazilian water and sanitation sector drafted a new regulation and conducted inspections to promote the implementation of this policy. This article analyzes the effect of the regulation and enforcement on the degree of implementation of the social tariff. It introduces an index that measures the implementation of this policy. The data analyzed are unprecedented, corresponding to a sample of 572 municipalities of the Minas Gerais state. The results of the Wilcoxon tests indicate an increase in the implementation of the social tariff in all regions of the Minas Gerais state after regulatory enforcement. The results of the panel data models suggest that the regulation increases the implementation of this policy. This article contributes to the literature by highlighting the importance of regulation in the implementation of pro-poor policies in the water supply and sanitation sector. In addition, it contributes so that other regulatory agencies can adopt the implementation index to inspect the social tariff.