Changes in the market structure of the public water supply – an analysis of economic, ecological and social effects considering Germany as example

This study was written by Matthias Egerer while working at the Ifo Institute for Economic Research in Munich, Germany. It was accepted as PhD thesis at the University of Kassel, Chair for the Theory of Private and Public Firms (Prof. Hans G. Nutzinger), and finished in November 2004; second adviser was Prof. Rolf-Ulrich Sprenger (Ifo Institute, Munich / College of Europe, Bruges). The study investigates the economic, ecological and social effects of changes in the market structure of the drinking water supply in Germany, either by a privatisation of the supply companies or by a liberalisation of the market. Thereby a distinction is made between measures to liberalise the market in terms of common carriage and measures in the form of tendering for the closed supply areas. The theoretical part of the dissertation makes a distinction between neo-classical economic theory that analyses the effects on allocation and efficiency, neo-classical environmental economics, and ecological economics, which, following Robert Costanza, is understood as a science of sustainability. In order to be able to prognosticate the expected effects of the possible measures, the experiences gained in other countries with different types of supply systems are especially considered. These countries are England/Wales, France, and the Netherlands, as representatives of three typical supply systems that differ from the German one. The study concludes with a recapulatory review of the common arguments of the supporters and opponents of changes in the market structure and concluding political guidelines.