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What matters to performance? Structural and institutional dimensions of water utility governance

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  • Janice A. Beecher

Abstract

A prolific theoretical and empirical literature has examined the relevance of structures and institutions to public utility performance, with a particular emphasis on the discrete role of ownership. The empirical findings are inconsistent and mostly indeterminate. A narrow emphasis on ownership deflects attention from the inextricable role of governance. The impact of privatization may be marginal compared with alternative governance reforms. Offered here is an informal, practical, and parsimonious conceptual model that distinguishes between structural (endogenous) and institutional (exogenous) governance. Three structural dimensions (ownership form, practice standards, and enterprise autonomy) are juxtaposed against three institutional dimensions (market contestability, external review, and economic regulation). Each dimension may be complementary or substitutive. Given persistent monopoly, privatization may be unnecessary and will be insufficient for ensuring performance. Economic regulation is a prerequisite for privatization but privatization is not a prerequisite for reform. Focusing on the US water sector, this paper offers a descriptive analysis for understanding why this is the case. A pragmatic approach is to strengthen core governance capacities in relation to performance priorities, which ultimately matter most of all.

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  • Janice A. Beecher, 2013. "What matters to performance? Structural and institutional dimensions of water utility governance," International Review of Applied Economics, Taylor & Francis Journals, vol. 27(2), pages 150-173, March.
    • Handle: RePEc:taf:irapec:v:27:y:2013:i:2:p:150-173
    DOI: 10.1080/02692171.2012.752447
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    1. John Vickers & George Yarrow, 1988. "Privatization: An Economic Analysis," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262720116, April.
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    2. Guerrini, A. & Romano, G., 2017. "Contract renegotiation by an Italian wastewater utility: Action research to promote effective tariff revision," Utilities Policy, Elsevier, vol. 48(C), pages 176-183.
    3. Ouda, Omar K.M. & Al-Waked, Rafat F. & Alshehri, Abdulrahman A., 2014. "Privatization of water-supply services in Saudi Arabia: A unique experience," Utilities Policy, Elsevier, vol. 31(C), pages 107-113.
    4. D'Amore, Gabriella & Landriani, Loris & Lepore, Luigi & Testa, Maria, 2024. "A multi-criteria model for measuring the sustainability orientation of Italian water utilities," Utilities Policy, Elsevier, vol. 89(C).
    5. Landriani, Loris & Agrifoglio, Rocco & Metallo, Concetta & Lepore, Luigi, 2022. "The role of knowledge in water service coproduction and policy implications," Utilities Policy, Elsevier, vol. 79(C).
    6. Hellwig, Michael & Polk, Andreas, 2021. "Do political links influence water prices? Determinants of water prices in Germany," Utilities Policy, Elsevier, vol. 70(C).
    7. Dobbin, Kristin B. & Fencl, Amanda L., 2021. "Institutional diversity and safe drinking water provision in the United States," Utilities Policy, Elsevier, vol. 73(C).
    8. Romano, Giulia & Molinos-Senante, María & Guerrini, Andrea, 2017. "Water utility efficiency assessment in Italy by accounting for service quality: An empirical investigation," Utilities Policy, Elsevier, vol. 45(C), pages 97-108.
    9. González-Gómez, Francisco & García-Rubio, Miguel A. & González-Martínez, Jesús, 2014. "Beyond the public–private controversy in urban water management in Spain," Utilities Policy, Elsevier, vol. 31(C), pages 1-9.
    10. D'Amore, Gabriella & Landriani, Loris & Lepore, Luigi, 2021. "Ownership and sustainability of Italian water utilities: The stakeholder role," Utilities Policy, Elsevier, vol. 71(C).
    11. Massimiliano Agovino & Massimiliano Cerciello & Antonio Garofalo & Loris Landriani & Luigi Lepore, 2021. "Corporate governance and sustainability in water utilities. The effects of decorporatisation in the city of Naples, Italy," Business Strategy and the Environment, Wiley Blackwell, vol. 30(2), pages 874-890, February.
    12. Homsy, George C. & Warner, Mildred E., 2020. "Does public ownership of utilities matter for local government water policies?," Utilities Policy, Elsevier, vol. 64(C).
    13. Landriani, Loris & Lepore, Luigi & D'Amore, Gabriella & Pozzoli, Stefano & Alvino, Federico, 2019. "Decorporatization of a municipal water utility: A case study from Italy," Utilities Policy, Elsevier, vol. 57(C), pages 43-47.
    14. Fremeth, Adam R. & Holburn, Guy L.F., 2020. "The impact of political directors on corporate strategy for government-owned utilities: Evidence from Ontario's electricity distribution sector," Energy Policy, Elsevier, vol. 143(C).
    15. Sara Hughes & Jacqueline Peterson, 2018. "Transforming Municipal Services to Transform Cities: Understanding the Role and Influence of the Private Sector," Sustainability, MDPI, vol. 10(1), pages 1-9, January.
    16. Pinto, Francisco Silva & Simões, Pedro & Marques, Rui Cunha, 2017. "Raising the bar: The role of governance in performance assessments," Utilities Policy, Elsevier, vol. 49(C), pages 38-47.
    17. Massimo Florio, 2014. "Contemporary public enterprises: innovation, accountability, governance," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 17(3), pages 201-208, September.

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