| Abstract |
Good water services are essential. However, in many developing countries, the water services provided are inadequate, quality is often poor, providers financial sustainability may be under threat, and parts of the population do not receive services at all.
Sector reform, including regulatory reform can help improve services. Reforms often introduce private sector participation or reorganise public utilities so that they operate more efficiently. Regulatory design often focuses on best-practice models, but these model solutions are not always successful. Approaches to regulations need to be rethought with emphasis on the principles of regulation.
This paper aims to show how real experience supports the theoretical principles of good design and presents key regulatory concepts. The most important lesson for regulatory designers to bear in mind is that there is no single international best practice for regulatory design. A check-box approach to introducing regulation has often been unsuccessful
A better approach incorporates country-specific considerations and makes room for politics and pragmatic design features in regulation. It ensures also that regulatory decisions are credible and coherent by limiting the discretion given to decision-makers and setting out clear and simple rules and processes for their application to enhance transparency. This type of approach should helps designers to select a combination of legal instruments and organisations that best suits the specific environment, and that achieves regulatory coherence, predictability and legitimacy.
In this paper a review of international experience is summarised, identifying a number of design features that may be particularly helpful in improving these key attributes.
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