In a special issue of the Dutch economics journal Economisch Statistische Berichten devoted to "Market Order and Competition", Eric van Damme published a paper dealing with the above question. While "water" shares many of the same characteristics of network industries such as telecommunications and energy, it is treated very differently from these both at the European and the national level. For example, in the Netherlands, there is a prohibition on privatization and there is no national regulator: there is a general trust in traditional political control mechanisms to guard the public interests, to ensure efficiency and to keep prices down. The new "Water Law" that was sent to parliament at the beginning of December maintains these aspects. In a special issue of the Dutch economics journal Economisch Statistische Berichten devoted to "Market Order and Competition", Eric van Damme published a paper dealing with the above question. While "water" shares many of the same characteristics of network industries such as telecommunications and energy, it is treated very differently from these both at the European and the national level. For example, in the Netherlands, there is a prohibition on privatization and there is no national regulator: there is a general trust in traditional political control mechanisms to guard the public interests, to ensure efficiency and to keep prices down. The new "Water Law" that was sent to parliament at the beginning of December maintains these aspects. The paper "Leveren van water: met marktwerking meer nut", argues that benefits can be achieved by bringing water policy more in line with that in other sectors. In particular while (voluntarily) benchmarking has yielded efficiency improvements, the benefits have not yet been passed on to consumers: Dutch water companies generate (much) higher profits than a regulator, insisting on cost based pricing, would allow. These issues were also discussed in a TILEC seminar on December 15.
Dec 20, 2006
What makes the water sector different?
In a special issue of the Dutch economics journal Economisch Statistische Berichten devoted to "Market Order and Competition", Eric van Damme published a paper dealing with the above question. While "water" shares many of the same characteristics of network industries such as telecommunications and energy, it is treated very differently from these both at the European and the national level. For example, in the Netherlands, there is a prohibition on privatization and there is no national regulator: there is a general trust in traditional political control mechanisms to guard the public interests, to ensure efficiency and to keep prices down. The new "Water Law" that was sent to parliament at the beginning of December maintains these aspects. In a special issue of the Dutch economics journal Economisch Statistische Berichten devoted to "Market Order and Competition", Eric van Damme published a paper dealing with the above question. While "water" shares many of the same characteristics of network industries such as telecommunications and energy, it is treated very differently from these both at the European and the national level. For example, in the Netherlands, there is a prohibition on privatization and there is no national regulator: there is a general trust in traditional political control mechanisms to guard the public interests, to ensure efficiency and to keep prices down. The new "Water Law" that was sent to parliament at the beginning of December maintains these aspects. The paper "Leveren van water: met marktwerking meer nut", argues that benefits can be achieved by bringing water policy more in line with that in other sectors. In particular while (voluntarily) benchmarking has yielded efficiency improvements, the benefits have not yet been passed on to consumers: Dutch water companies generate (much) higher profits than a regulator, insisting on cost based pricing, would allow. These issues were also discussed in a TILEC seminar on December 15.