Energy institutionality in Bolivia has been postponed for years, and it is urgent to understand the impact of lacking a solid institutional framework in this sector, which revolves around the country’s economic agenda, said Tatiana Genuzio.
ISSUE 142 | 2025
Vesna Marinkovic U.
During CAEE 2025, the first lecture, which set the conceptual framework for the event, addressed a key issue for the country’s future: energy institutionality. Tatiana Genuzio, an expert in public policy design, delivered the presentation and began by emphasizing the importance of discussing a topic that has been neglected for years. “Many years have passed without addressing this issue, and it is urgent to understand the impact of not having a solid institutional framework in the energy sector,” she affirmed.
From the start, she presented a key premise: energy institutionality is an integral part of governance, understood as the set of norms, policies, processes, and institutions that allow an energy system to function sustainably, equitably, and efficiently. Within this framework, she stressed that good public policies those that address social, economic, and environmental issues with equity criteria are essential.
The speaker made an important distinction between public/state policy and party/government policy, underlining that the latter often responds to specific power interests, which has frequently distorted the design and implementation of structural reforms.
THE PROFILE OF A STRONG INSTITUTION AND SIGNS OF INSTITUTIONAL DETERIORATION
According to her, a robust energy institution must have legitimacy and social trust, technical capacity, transparency, adaptability, and above all, independence. “It is precisely in these pillars that the greatest symptoms of deinstitutionalization have occurred,” she noted, warning that this institutional fragility has affected strategic decision-making for Bolivia’s energy development.
Based on this premise, the presentation focused on the critical axes of energy institutionality. One of the most urgent was the regulatory framework. “To understand the outdated nature of our regulations, we must review our fundamental laws: the Hydrocarbons Law and the Electricity Law,” Genuzio stated.
“Regarding the Hydrocarbons Law, in force since 2005, its main goal was to secure revenue for the State, a goal that was achieved while international gas and oil prices were high. But since 2015, with the price drop, the model became uncompetitive,” Genuzio explained.
She added that while Bolivia’s Government Take averages 80%, Colombia’s is 39%, Peru’s 54%, and Argentina’s 53%, clearly showing a disincentive to invest in exploration and production of gas and liquids in the country.
OUTDATED ELECTRICITY LAW AND CROSS-SUBSIDIES
Regarding the 1994 Electricity Law, she explained that it was conceived under the principle of vertical disintegration of generation, transmission, and distribution activities. However, she added that the Nationalization Decree replaced this principle with a vertical integration scheme that has distorted costs and complicated efficiency evaluation.
Additionally, she explained that the law does not address alternative energies, and subsequent government adjustments such as the 3% cap on nodal prices prevent tariff updates.
“This has generated deficit stabilization funds and cross-subsidies that distort economic signals for both consumers and generators,” she noted.
“What is needed is to eliminate these funds, make subsidies transparent, and design an adequate framework that allows efficient remuneration for renewable energies,” Genuzio emphasized.
She also proposed an urgent review of fundamental principles to update the energy sector’s regulatory framework: legal clarity, timely updates, social participation, transparency, and adaptability
LOSS OF REGULATION, INSTITUTIONAL DISCOORDINATION, AND THE URGENCY OF COMPLIANCE
One of the most serious warnings raised during her presentation on energy institutionality in Bolivia was the effective loss of the regulatory function. She argued that although current regulations establish differentiated roles such as YPFB as the operator and the ANH as the regulatory body in practice, this structure has been distorted.
“A clear example is Law 3740 on the sustainable development of the hydrocarbons sector, which establishes that YPFB must approve development plans to guarantee maximum reserve recovery. However, without a truly independent and active regulator, there are no evaluation indicators or early warnings that would allow efficient monitoring of compliance with these objectives,” she stated.
Furthermore, she added that although YPFB should publish semiannual cost information, the data disseminated is highly aggregated, preventing precise technical and economic evaluations. The presenter noted:
“The information exists, but it is not published transparently.”
In her view, this has directly contributed to the decline of natural gas fields, a phenomenon that, according to the expert, could have been anticipated if a more robust institutional system had been in place. Moreover, she argued that outdated regulations and weakened oversight due to a lack of autonomy and transparency from supervisory entities exacerbate the problem.
DISCOORDINATION BETWEEN INSTITUTIONS AND AGENCY THEORY
Another key focus of Genuzio’s presentation was the lack of institutional coordination. She pointed out that although the Constitution establishes that the Bolivian Industrialization Company (EBI) must lead the hydrocarbons industrialization process, a 2011 decree delegated parallel competences to YPFB, generating overlaps in functions and confusion in the execution of public policies.
A similar case occurs with the right to prior consultation, where actors such as the ANH, the Electoral Body, and subnational governments should intervene. However, she observed that a lack of inter-institutional coordination hinders proper application, affecting community rights and delaying strategic projects.
“Energy institutionality in Bolivia requires urgent reform. Without independent regulation, institutional coordination, or regulatory compliance, it will be very difficult to face the structural challenges…”
According to her, this scenario fits within what is known as agency theory, where the “principal” the citizen or normative authority delegates a function to the “agent” the official or executing institution. She asserted that in Bolivia, this figure is distorted by multiple principals (including power groups and political parties), limiting the effective development of public policies.
HUMAN CAPITAL AND POLITICIZATION OF THE SECTOR
One of the most sensitive aspects of Genuzio’s diagnosis was the interference of party politics in public administration.
“Many officials avoid making technical decisions for fear of reprisals or political pressure,” the expert denounced. She added that this dynamic has severely deteriorated public service quality and is one of the main causes of deinstitutionalization. Within this context, she pointed out that human capital in the energy sector should be based on technical, meritocratic, and specialized criteria rather than political quotas or ideological affinities.
THE URGENCY OF IMPLEMENTING A TRUE COMPLIANCE SYSTEM
Finally, she addressed a key component to rebuild institutionality: compliance, i.e., normative and ethical adherence within both public and private institutions.
She said that this concept has gained special relevance following the nationalization of the energy sector, stemming from Supreme Decree 28701 “Heroes of the Chaco” of 2006, a context in which YPFB and ENDE subsidiaries operate under a hybrid regime: they are corporations subject to the Commercial Code but also supervised by the General Comptroller’s Office.
In her view, this legal ambiguity has created serious legal gaps. For example, when contractual breaches by employees are detected, legal action cannot proceed because they are not considered public officials, despite being subject to public sector norms.
She noted that although compliance was incorporated into the 2023 Plurinational Anti-Corruption Policy, effective regulation to guarantee its enforcement does not yet exist, leaving the door open to irregularities and lack of control.
“Energy institutionality in Bolivia requires urgent reform. Without independent regulation, institutional coordination, or regulatory compliance, it will be very difficult to face the structural challenges of the energy sector,” the presenter concluded.
“Many officials avoid making technical decisions for fear of reprisals or political pressure.”
