This article is a cry of alarm, perhaps a futile one, but I cannot refrain from writing it. It arises from personal experiences and reflections on the recent actions of a particular regulator. I am referring to ANAC, the Portuguese Civil Aviation Authority, which unfortunately has become a paradigmatic example of what I call ‘little tyrants’.
The enforcement of the law and the little tyrants
In a state governed by the rule of law, it is essential to have legislation and public services capable of supporting it and ensuring compliance. Such oversight may occur at the time a public service is provided or later, through audits or inspections. A healthy economy always depends on the effectiveness of these functions.
Portugal’s competitive disadvantage begins at the very core of the application of the civil code, especially when compared to Common Law countries, notably the Anglo-Saxon ones. We should take advantage of the mechanisms available to evolve the law in society’s favor, which requires learning from past mistakes.
A recent and striking example is the European MiCA regulation (Markets in Crypto Assets), in force across several EU member states since July 2024. In Portugal, the Government has only recently begun to take the first steps towards implementation, and still with no defined timeline. Nothing prevented us from acting swiftly, as we know that in technology the advantage lies in being first. We simply did not advance because someone was able to neglect their moral duty without personal consequences. That is, after all, the definition of a ‘little tyrant’: a person with limited formal power who exercises authority in an abusive, authoritarian, or petty way.
The problem with the substance of the law
How often do we feel that laws are drafted by people who have never had real contact with the sector they are meant to regulate? In Common Law countries, legislation is essentially proposed by civil society. In Portugal, the law is imposed, and the so-called ‘public consultation’ rarely serves as any real safeguard.
The moral responsibility of regulators begins here. They should be the public body closest to the regulated sector, but this requires leaving their offices and maintaining a healthy relationship with economic agents. In many cases, however, that is not what happens.
For example, the Portuguese Association of Ultralight Aviation (APAU) recently organized a forum with three foreign regulators (from Czech Republic, France, and Spain), at a time when the evolution of aviation law in Portugal is under discussion. ANAC was invited and attended but refrained from attending the presentations of its foreign counterparts. Words fail me to describe such behavior. Yet, this attitude is hardly surprising: despite smiles and promises of dialogue, the draft is not even known to APAU. Where, then, is the healthy discussion? Am I mistaken, or is this the typical case of a paternalistic ‘little tyrant’?
The abuse in the enforcement of the law
The most visible and morally reprehensible side of regulators lies in how ‘little tyrants’ throughout the decision chain interpret the law as they please.
In some countries, such discretion opens the door to corruption. That is not my point here, as that has not been my experience. I refer instead to abuse, arbitrariness, and pettiness in the interpretation and enforcement of the law. The effects are devastating: the resulting economic friction destroys value through wasted time on pointless bureaucracy and entrepreneurs who simply give up.
It is no coincidence that the European Union has recently mandated a 30% reduction in regulatory obligations and bureaucracy applied to SMEs.
Possible solutions
In certain cases, compliance can be achieved by appealing to foreign regulators, provided legislation allows it. This is the principle of the European passport for services. For example, unlike cars, an aircraft can be registered in another EU country and be subject to that country’s regulatory rules. This is precisely why most general aviation aircrafts do not carry Portuguese registration. The same occurs with rolling stock requiring conformity certificates, often obtained in Spain when Portugal’s IMTT proves incapable. Worse still, when no refuge exists with another regulator, economic activity simply becomes impossible, allowing companies from other countries to occupy our natural economic space. And in all these cases, it is not the law that fails. It is the ‘little tyrants’.
What mechanisms do we have to counter this today?
1. Hierarchical appeal allows a ‘little tyrant’ to be exposed to their superior. It works if the superior is not a ‘little tyrant’ as well.
2. The “yellow book” in public administration, equivalent to a complaints book, seems ineffective, as those at the top of the hierarchy are primarily concerned with avoiding negative statistics.
3. The courts can also be used. They may even work, but they are expensive, slow, and worthwhile only in cases of significant value.
Ultimately, this is a question of culture and morality. Being a ‘little tyrant’ or not is a choice. Some claim that they are the remnants of Salazarism, but after more than fifty years of democracy, I refuse to believe this is ingrained in Portuguese culture. I prefer to think that we lack mechanisms of self-regulation. After all, allowing ‘little tyrants’ to exist within institutions is also a choice.
Paths for the future
It is urgent to create ways to limit the action of ‘little tyrants’, starting with regulators, and we can learn from the practices of proximity to economic sectors seen in Common Law countries.
One possibility would be to hold regulators accountable through economic performance indicators. These could be the starting point of an anti–’little tyrant’ policy. Today, the ‘little tyrant’ does not care about the economic impact of their decisions: they pay no salaries, are not held accountable, and there is no way to measure the outcome of their actions on the economy. For them, a growing sector simply means more work for the same pay.
I therefore issue this challenge: that every responsible person who considers themselves fair reflects on how to ensure that the resources devoted to enforcing the law are also at the service of economic development. What performance indicators can we apply? What positive and negative consequences can be implemented? Beyond the justice achieved, few actions would have such a direct impact on creating the competitive advantages we so urgently need.
Paulo Cardoso do Amaral, Professor da Católica Lisbon School of Business & Economics