The Regulation of Water and Sanitation Services in DCs

This note inaugurates a new collection launched by the Agence Française de Développement's research department, A Savoir, which gathers literature reviews or existing knowledge on issues with an operational interest. It reviews existing knowledge on water and sanitation regulation and identifies areas for research in order to improve current practices, particularly in developing countries. Water and sanitation services, which qualify as essential public services, need to be regulated from an economic, environmental and public health point of view. Economic regulation of such services includes regulation of tariffs, services quality, competition and in some cases, consumer protection. This note argues that we should go beyond the sterile debate between "regulation by contract" (the so-called French model) and "regulation by agency" (the so-called anglo-saxon model) to consider how critical regulatory functions can best be allocated between institutions. It also considers how such allocation can be tailored depending on local institutional arrangements (and in particular, the degree of decentralisation), management models (for public as well as private enterprises) and levels of economic development (examining what could constitute the key tenets of "pro-poor" regulation in the water and sanitation sector). This publication is available both in French and in English.