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Drowned in an inch of water

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  • Massarutto, Antonio
  • Ermano, Paolo

Abstract

Italy reformed its water and sanitation services in 1994. The strategy aimed at transforming public entities, financed by the central budget, into self-sufficient professional companies regulated at arms' length. Nearly 20 years after, the reform has failed to deliver (despite some partial success). Italians have been divided in two parties: those blaming public sector inefficiencies and calling for competitive tendering; and those refusing to privatize water and willing to go back to the fiscal budget. In this article, we suggest that both parties are wrong. Underperformance is not related to the ownership structure of water companies, but rather to poor regulatory design and lack of understanding of the regulatory requirements that are implicit in the management model chosen, namely the concession contract.

Suggested Citation

  • Massarutto, Antonio & Ermano, Paolo, 2013. "Drowned in an inch of water," Utilities Policy, Elsevier, vol. 24(C), pages 20-31.
  • Handle: RePEc:eee:juipol:v:24:y:2013:i:c:p:20-31
    DOI: 10.1016/j.jup.2012.09.004
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    References listed on IDEAS

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    Cited by:

    1. Romano, Giulia & Guerrini, Andrea & Campedelli, Bettina, 2015. "The new Italian water tariff method: A launching point for novel infrastructures or a backwards step?," Utilities Policy, Elsevier, vol. 34(C), pages 45-53.
    2. Clifton, Judith & Díaz-Fuentes, Daniel & Revuelta, Julio, 2014. "Financing utilities: How the role of the European Investment Bank shifted from regional development to making markets," Utilities Policy, Elsevier, vol. 29(C), pages 63-71.
    3. Olivier CRESPI REGHIZZI, 2013. "Milan’s water and sanitation service:from full direct provision to corporatization," CIRIEC Working Papers 1308, CIRIEC - Université de Liège.
    4. repec:cbu:jrnlec:y:2017:v:4:p:179-185 is not listed on IDEAS
    5. repec:spr:waterr:v:31:y:2017:i:8:d:10.1007_s11269-016-1496-2 is not listed on IDEAS

    More about this item

    Keywords

    Water service regulation; Regulatory impact assessment; Concession contract; Italy;

    JEL classification:

    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law

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