Description: Incentive regulation is a regulatory approach designed to motivate companies to improve their efficiency and the quality of the services they provide. This type of regulation is based on the premise that by establishing economic and normative incentives, companies will be more likely to optimize their operations and innovate in their processes. Through mechanisms such as adjusted tariffs, performance bonuses, and penalties for non-compliance, the aim is to encourage organizations to achieve higher standards in service delivery. Incentive regulation is particularly relevant in sectors where competition is limited, such as public services, where companies may have less motivation to improve without market pressure. This approach not only benefits consumers by providing them with higher quality services but can also contribute to the sustainability and operational efficiency of companies. In summary, incentive regulation is a key tool in modern regulatory policy, seeking to align the interests of companies with those of consumers and society at large.
