Publication: Economic Regulation of Urban Water and Sanitation Services
Date
2008-06
ISSN
Published
2008-06
Author(s)
Ehrhardt, David
Groom, Eric
Halpern, Jonathan
O'Connor, Seini
Abstract
The design of regulation for water
supply and sanitation (WSS) services has tended to follow a
check-box approach - diagnose the need, prescribe an
independent regulator or similar model (often developed in a
different sector or country), and hope for the best. This
approach has not always worked well. Regulation cannot solve
all the problems that confront WSS services, and imported
models may not work locally. Regulation must be based on a
clear understanding of its capabilities and limits. Its
design must reflect not only key principles of regulation,
but also local needs, local legal instruments, and local
organizations. Economic regulation addresses the problems
posed by natural monopolies by compelling service providers
to keep costs down, charge fair prices, and provide good
service. An effective system also designates an entity to
implement and enforce the regulations. Together, these
functions remain limited in scope. To complement and
reinforce economic regulation, a supportive policy
environment and good governance of service providers are
required. In short, economic regulation should be designed
in tandem with other reform efforts.
Citation
“Ehrhardt, David; Groom, Eric; Halpern, Jonathan; O'Connor, Seini. 2008. Economic Regulation of Urban Water and Sanitation Services. Water P-Notes; No. 6. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/9873704a-7fe6-544e-81a7-95e19979b560 License: CC BY 3.0 IGO.”