Sustainability of economic development and governance patterns in water management - an overview on the reorganisation of public utilities in Campania, Italy, under EU Framework Directive in the field of water policy (2000/60/CE)

The paper addresses the issue of sustainable development in water policy under the EU Framework Directive (2000/60/CE), and its implications on the governance of public utilities. Economic efficiency and environmental protection, far from being contradictory, are necessarily complementary in order to achieve the EU Water Framework Directive principles and objectives. Assuming public utilities as “environmental services”, the first part focuses on the theory of economic regulation for public utilities and innovative models of public/private governance for water management. In the second part, following the steps undertaken in Campania (since the first national reform in 1994), the paper tries to identify the main trends in water policies and management, resulting from the local governement efforts to comply with both environmental protection requirements under the EU Framework Directive and economic development programmes. The field of analysis is EU Structural Funds policy, as implemented by the Regional Operational Programme of Campania 2000-2006, which supports private and public investments in water infrastructures and management. According to the European regional policy, environmental protection requirements must be integrated into the definition and implementation of development programmes aimed at financing water infrastructures and innovative management of water services. The mid-term review on the performance of Structural Funds in Campania, shows that public/private partnership plays a crucial role in water policy, even for the integration of environmental concerns into the reorganisation of public utilities management.