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The hybrid model for economic regulation of water utilities: Mission impossible?

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  • Jensen, Olivia
  • Wu, Xun

Abstract

The two main approaches to economic regulation—regulation by contract and regulation by agency—may both encounter significant challenges in regulating public-private partnerships when institutions are weak. As a result, the hybrid model, a mixture of elements from both systems, is widespread. This paper considers hybrid regulation as a distinct regulatory model. A case study of water services regulation in Manila from 1997 to 2015 suggests that hybrid regulation is both possible and compelling. Yet, while it might help to expedite private-sector involvement initially, fundamental tensions between the two underlying approaches may undermine PPP sustainability if not addressed appropriately at the outset.

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  • Jensen, Olivia & Wu, Xun, 2017. "The hybrid model for economic regulation of water utilities: Mission impossible?," Utilities Policy, Elsevier, vol. 48(C), pages 122-131.
    • Handle: RePEc:eee:juipol:v:48:y:2017:i:c:p:122-131
    DOI: 10.1016/j.jup.2016.04.017
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