The exercise of any economic activity is ensured to everyone, regardless of authorization from government, except in the cases set forth by law. However, as the normative and regulating agent of the economic activity, the State shall, in the manner set forth by law, perform the functions of control, incentive and planning.
Besides the protection of private initiative, the human labor promotion is also under constitutional protection in Brazil. Therefore, it is reasonable that the Brazilian State has a minor role to play within the economic relationships, comparing to a planned economy, for instance.
Even so the Federal Constitution grants specific competencies to the public sector related to the provision of some services, which we may define as “public services”. The Public Administration reserved the rights to develop those activities itself, but there are cases that the Federal Constitution allows the government to choose a private partner to provide those services.
The Union shall have the power to operate, directly or through authorization, concession or permission: the electric power services and facilities and the energetic exploitation of watercourses, jointly with the states wherein those hydroenergetic potentials are located; air and aerospace navigation and airport infrastructure; railway and waterway services between seaports and national borders or which cross the boundary of a state or territory; interstate and international highway passenger transportation services; sea, river and lake ports.
The Constitution of the Republic of 1988 provides for the possibility that the particular acts in the operation of public interest activities through partnership with the government. Partnerships between government and the private sector is an important alternative to the expansion of investments in projects of public interest in Brazil.
Partnerships between government and the private sector are being encouraged by political and legal stability, security and regulatory maintenance of contractual basis and expectations of both contractors.