WATER GLOBAL PRACTICE WSS GSG UTILITY TURNAROUND SERIES Annotated Bibliography Global Study on the Aggregation of Water Supply and Sanitation Services AUGUST 2017 Gustavo Ferro © 2017 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington, DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. 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Publication Object Approach/Method Scope Main findings Accessible at: Abbot and Cohen (2009), The article briefly reviews the Literature review International The article discusses input and http://www.sciencedirect.com/science​ “Productivity and various measures that have been output data requirements for pro- /­article/pii/S0957178709000241 Efficiency in the Water used to gauge productivity and ductivity and efficiency measures, Industry.” efficiency in the water sector. It findings related with scale and summarizes the key structural scope, public versus private own- findings that have been deter- ership of assets and the impact mined and considers potential of regulation, and roads for areas for future research. future environmental and other research. ACIL Tasman Pty. Ltd The report seeks to investi- Conceptual discussion Australia The report supports the view that http://www.erawa.com.au​ (2007), Size and Scope gate economies of size and Comparison with system size economies have been /­cproot/6227/2/ACIL%20Tasman%20 Economies in Water and scope associated with dif- other infrastructure accessed with a much less aggre- -%20Size%20and%20Scope%20 Wastewater Services: ferent configurations of the sectors that have gated system in electricity sector Economies%20in%20Water%20 An Investigation into Water Corporation’s operations been unbundled than in water sector. Different and%20Wastewater%20Services.pdf Economies of Size and (Australia). stages of water supply and sani- Scope Associated with tation (WSS) are analyzed in the Alternative Structures for search for economies of scale. the Water Corporation’s Activities. Agrawal (2009), The article analyzes performance Conceptual and India This field note uses global expe- http://documents.worldbank.org​ Performance Improvement agreements that could help applied discussion riences to explain some of the /­curated/en/346331468337191655​/­pdf​ Planning: Enhancing bring about a change in the arrangements and brings out /­715250BRI0Box370077B00PUBLIC00P Water Services through way services are delivered in a lessons learned in the Indian IP50Press.pdf Performance Agreements. sustainable manner, through a context. change in institutional arrange- ments and associated incentives. Such contractual arrangements are customer oriented and are based on financial viability. table continues next page 3 4 Publication Object Approach/Method Scope Main findings Accessible at: Allers and Geertsema The paper studies how munici- Empirical The Netherlands Although amalgamation reduces https://www.coelo.nl/images/artike- (2014), “The Effect pal amalgamation affects local investigation government budget spending, len​/­The_effects_of_local_government​ of Local Government government spending and public there is no corresponding spend- _­amalgamation_on_public_spending​ Amalgamation on Public services level. ing increase in public services. _­taxation_and_service_levels.pdf Spending and Service Also, amalgamation does not Levels: Evidence from increase house prices, as an 15 Years of Municipal approximate indicator of better Boundary Reform.” services. Andrews, Pritchett, The document points out that Analytical discussion Worldwide The report proposes an approach https://www.cgdev.org/publication​ and Woolcock (2012), many reform initiatives in devel- called Problem-Driver Iterative /­escaping-capability-traps-through​ “Escaping Capability Traps oping countries fail because they Adaptation to escape capability -problem-driven-iterative-­adaptation​ through Problem-Driven are merely “isomorphic mimicry,” traps. It focuses on solving locally -pdia​-working-paper Iterative Adaptation pretending to reform policies by identified and defined problems (PDIA).” changing only the appearance, of performance. The approach is not the substance. This dynamic flexible and iterative. yields capability traps, in which state capacities deteriorate. Antonioli and Filippini The paper estimates a multi- Econometric appraisal Italy The results underline the impor- http://www.sciencedirect.com/science​ (2001), “The Use of a variate variable cost function to tance of explanatory variables /­article/pii/S0957178702000656 Variable Cost Function analyze the cost structure of a such as cost of labor, water loss, in the Regulation of the sample of Italian water distribu- and service area characteristics. Italian Water Industry.” tion companies to improve the Also, they indicate the existence tariff regulation process. of economies of output and cus- tomer density and the presence of small diseconomies of scale. Ashton (1999), “Economies The study estimates a variable Econometric appraisal England and Wales The results indicate that if the https://www.researchgate.net​ of Scale, Economies of cost model of the UK water of cost function for water industry has not been in /­publication/4999428_Capital​ Capital Utilisation and industry. From this variable cost water suipply and long-term equilibrium (in terms _Utilisation_and_Scale_in_the_English​ Capital Utilisation in the function, estimates of economies sanitation companies of capital), both merger and _and_Welsh_Water_Industry English and Welsh Water of scale and economies of capital acquisition among water com- Industry.” utilization and capacity utiliza- panies are not justified in terms tion are drawn. of cost efficiency. A low level of capital utilization is indicated for the water industry. table continues next page 5 Publication Object Approach/Method Scope Main findings Accessible at: Aulich, Sansom, and The article studies 15 cases of Case studies and Australia and New The data reveal little evidence http://www.tandfonline.com/doi​/­abs​ McKinlay (2014), “A different forms of municipal interviews Zealand of consistent economies of scale /­10.1080/03003930.2013.775124?src​ Fresh Look at Municipal consolidation, including amalga- from consolidation. However, =recsys&journalCode=flgs20 Consolidation in Australia.” mation, together with a series of both case studies and interviews interviews of senior practitioners show that consolidation gen- from the local government erated economies of scope and sector. some strategic capacity. Baietti and Curiel The paper examines the applica- Conceptual discussion Worldwide The paper develops the concept http://documents.worldbank.org​ (2005), “Financing Water bility of conventional formulas to Policy paper of appropriate costs to assess /­curated/en/505111468322452330​/­Fina Supply and Sanitation determine revenue requirements proper tariffs. ncing-water-supply-and-sanitation-inve Investments: Estimating for average tariffs. It discusses stments-estimating-revenue-requireme Revenue Requirements and the impact of capitalization nts-and-financial-sustainability Financial Sustainability.” issues on revenue requirements and also highlights intangible impacts. Baietti, Kingdom, and The study examines water supply Case studies on com- Mexico The study identifies actions for http://siteresources.worldbank.org​ van Ginneken (2006), and sanitation utilities and their monalities of well-run management improvement of /­INTWSS/Resources/Workingnote9.pdf Characteristics of Well- sustainability. Changes occurred public utilities utilities that their owners could Performing Public Water from old monolithic local implement. Utilities. monopolies and new complex services. Baranzini and Faust (2010), The study estimates economies Empirical Switzerland The study finds moderate returns https://hesso.tind.io/record/264/files​ “The Cost Structure of product density, consumer investigation to production density, which /­lm.pdf of Water Utilities in density, and scale for the Swiss decrease with the utility size. Switzerland.” WSS. It contemplates environ- mental factors on costs beyond output and input prices. table continues next page 6 Publication Object Approach/Method Scope Main findings Accessible at: Barraqué (2003), “The The study discusses the evolu- Conceptual discussion Developed The study categorized the three http://stanford.edu/dept/france​ Three Ages of Engineering tion of the sector of water and countries stages in the evolution of WSS -­stanford/Conferences/Risk/Barraque​ for the Water Industry.” sanitation services along the in developing countries—the .pdf time in developed countries. first concentrated in coverage, the second in quality of service, and the third in environmental protection. Batley and Harris (2014), The service characteristics Comparative analysis International The paper finds that specific https://www.odi.org/sites/odi.org.uk​ “Analysing the Politics of approach, described here, was on the possibility of clusters of characteristics may /­files/odi-assets/publications-opin- Public Services: A Service developed as a tool to explain sharing experience influence the incentives and ion-files/8913.pdf Characteristics Approach.” the political dynamics of partic- and practices accountability of the actors in ular services. It has been tested service provision. Additional and elaborated on through characteristics proposed by sector discussions, focusing on current specialists include the feasibility debates in sector organizational of coproduction, opportunities reforms and policies. for rent seeking, and the duration and durability of chronic condi- tions and services. Bel and Fageda (2006), The study analyzes the use of Theoretical review Spain The study concludes that coop- ­ penview/4 http://search.proquest.com​/o “Between Privatization intermunicipal cooperation to and data analysis, eration is more likely when 46d90ec28c6d498ab060fa561354342​ and Intermunicipal exploit scale economies as an concerning solid production is public, whereas pri- /­1?pq-origsite=gscholar&cbl=75984 Cooperation: Small alternative to privatization. waste and WSS vatization is more frequent when Municipalities, Scale municipalities provide the ser- Economies and Transaction vices. Production costs are lower Costs.” when municipalities cooperate. Bel and Fageda (2008), The paper examines the influ- Econometric appraisal Spain The paper finds that privatization http://www.ub.edu/irea/working​ “Local Privatization, ence of transaction costs and is less common for water distribu- _papers/2008/200804.pdf Intermunicipal political factors on local choices tion than for solid waste collec- Cooperation, Transaction through new variables instead tion because of higher transaction Costs and Political of those traditionally analyzed costs in the former. Interests: Evidence from in the literature. It considers the Spain.” role of intermunicipal coopera- tion instead of privatization to exploit economies of scale and scope. table continues next page Publication Object Approach/Method Scope Main findings Accessible at: Berg (2013), “Best The article examines the key Literature survey Worldwide Sector regulation has to be http://repositorio.cepal.org/bitstream​ Practices in Regulating issue to design an institutional embedded in an adequate and /­handle/11362/4079/S2013252_en​.­pdf;​ State-Owned and system that reduces the likeli- consistent institutional framework jsessionid=0F0E1684CBA3C7DE53E2​ Municipal Water Utilities.” hood of capture, corruption, and to have a positive impact on per- F67B45A2A3AB?sequence=1 low levels of utility performance formance. Sector regulation by in developing countries’ WSS itself is no guarantee of perfor- utilities. mance improvements. Case stud- ies and empirical analyses suggest that without significant changes in the supporting institutions, the standard tools of regulation will not be effective. Berg and Vargas The study explores the problems Case study Bolivia The study reinforces the argu- http://warrington.ufl.edu/centers/purc​ (2008), “Bolivian Utility that political polarization poses ments for key performance /­purcdocs/papers/0811_Berg_Bolivian​ Regulation: Lessons for a for technical regulation of WSS. indicators and the use of bench- _Utility_Regulation.pdf Water Sector Agency.” marking and discusses the evolu- tion of regulatory institutions. Bhattacharyya, Harris, In this article, a stochastic Econometric appraisal United States Results show that when the http://www.sciencedirect.com/science​ Narayanan, and Raffiee frontier cost function is used to operation area is small, privately /­article/pii/0166046295021078 (1995), “Specification and specify the cost of inefficiency owned water utilities are com- Estimation of the Effect of publicly and privately owned paratively more efficient. Public of Ownership on the urban water utilities in terms water utilities are comparatively Economic Efficiency of the of their different ownership more efficient when the scale of Water Utilities.” structures and firm-specific operation is large. There is evi- characteristics. dence of firm-specific effects. Bhattacharya, Parker, The paper analyzes the relative Econometric appraisal United States The paper finds evidence of sig- http://www.jstor.org/stable​ and Raffiee (1994), “An efficiency of WSS utilities in a nificant economies of scale for /­pdf/3146322.pdf Examination of the Effect cross section of private and pub- both public and private compa- of Ownership on the lic companies. It compares the nies. The empirical results provide Relative Efficiency of effect of type of ownership on evidence that public water util- Public and Private Water performance. ities are more efficient than pri- Utilities.” vate utilities on average but are more widely dispersed between best and worst practice. table continues next page 7 8 Publication Object Approach/Method Scope Main findings Accessible at: Bish (1996), The report summarizes key Conceptual discussion Canada (British The report proposes strategies for https://www.uvic.ca/hsd/publicadmin​ Amalgamation: Is It the points of a study of the govern- Columbia) reforming local government orga- /­assets/docs/BBish/amalgamation​ Solution? ment reform of metropolitan nization of services and recogniz- _­­solution.pdf areas. ing diversity, and it discusses the need of multiorganizational sys- tems to deal with such diversity. Bish (2002), The paper studies how to deter- Descriptive and ana- Canada (British The paper describes British https://www.uvic.ca/hsd/publicadmin​ “Accommodating Multiple mine institutional arrangements lytical discussion Columbia) Columbia’s system, how it /­assets/docs/BBish/bish_indiana_u_2002​ Boundaries for Local and boundaries for various public resolves theoretical issues, prob- .pdf Services: British Columbia’s goods and services that are pre- lems that have arisen, and the Local Governance System.” ferred by different audiences or evolution of those problems. It that possess different production also provides suggestions for characteristics. incremental modifications in a county- municipality system that could achieve similar results in many U.S. metropolitan areas. Blesse and Baskaran The article studies the fiscal con- Econometric appraisal Germany The article finds substantial and http://ftp.zew.de/pub/zew-docs/dp​ (2013), “Do Municipal sequences of municipal mergers immediate reductions in total, /­dp16041.pdf Mergers Result in Scale by making use of a large-scale administrative, and current Economies? Evidence from merger reform in the German expenditures after compulsory a German State.” federal state of Brandenburg. It mergers. Voluntary mergers have explores the fiscal consequences smaller and less robust effects. of both compulsory and (semi-) voluntary municipal mergers within the same institutional setting. Bottasso and Conti This study analyzes the evolution Econometric study England and Wales The main results of this study https://pdfs.semanticscholar.org​/­e856 (2003), “Cost Inefficiency of operating cost inefficiency show that operating cost inef- /234ddfb267a9962fbcd3eaec6cab063 in the English and Welsh for the English and Welsh ficiency has decreased over the b9a2b.pdf Water Industry: An water industry over the period sample period and that ineffi- Heteroskedastic Stochastic 1995–2001. The main aim is to ciency differentials among firms Cost Frontier Approach.” provide an overall picture of the have steadily narrowed. The likely industry cost inefficiency, consid- reasons are the incentives pro- ering both water and sewerage vided by comparative and capital companies and smaller water- market competition, fully opera- only companies. tive after the 1994 price review. table continues next page Publication Object Approach/Method Scope Main findings Accessible at: Bottasso and Conti The article estimates a variable Econometric study England The estimates suggest the exis- http://www.sciencedirect.com/science​ (2009), “Scale Economies, cost function to analyze cost tence of unexploited economies /­article/pii/S0166046208000707 Technology and Technical economies and technical change of output and customer density Change in the Water in the English water-only sector and small-scale economies that Industry: Evidence from over the period 1995–2005. appear to be increasing with the English Water Only ­ population density. These find- Sector.” ings suggest that moderate cost savings from prudent mergers ­ could be expected. Browder, Xie, Kim, Gu, The report presents a strategic Policy paper with China Addressing future challenges will http://documents.worldbank.org​ Fan, and Ehrhardt (2007), framework and a set of rec- extensive experience require more investment and new /­curated/en/840621468016215926​ Stepping Up: Improving ommendations for addressing collection through approaches to enhance gover- /­pdf/409640P0704130Public.pdf the Performance of China’s the challenges faced by China’s interviews nance and regulation at national, Urban Water Utilities. urban WSS utilities and acceler- provincial, and municipal levels; ating improvements. to boost utility operational and financial performance; to increase user fees; to ensure adequate fiscal support; and to explicitly recognize the constraints facing lower-capacity cities and towns. table continues next page 9 10 Publication Object Approach/Method Scope Main findings Accessible at: Carvalho and Marques Data envelopment analysis Conceptual discus- Portugal There is evidence of (a) econo- https://www.researchgate.net/publi- (2014), “Computing methods present some draw- sion and empirical mies of vertical integration and cation/259267536_Computing_econo- Economies of Vertical backs that might lead to biased application (b) economies of scale in drinking mies_of_vertical_integration_economies​ Integration, Economies of results when studying economies water supply utilities and in water _of_scope_and_economies_of_scale_using​ Scope and Economies of of scope and scale. This paper and wastewater utilities operat- _partial_frontier_nonparametric_methods Scale Using Partial Frontier proposes a methodology based ing mainly in the retail segment. Nonparametric Methods.” on more robust partial frontier Economies of scale were found nonparametric methods to look in water and wastewater utili- for scope and scale economies. ties operating exclusively in the Through this methodology, it is wholesale segment, and disecon- possible to assess the robust- omies of scope were also found in ness of these economies, and in some of these utilities. The pro- particular to assess the influence posed methodology also allowed that extreme data or outliers the authors to conclude that the might have on them. existence of some smaller utili- ties makes the minimum optimal scales go down. Carvalho, Marques, and The paper updates the literature Literature survey Worldwide The results indicate that there is a https://mpra.ub.uni-muenchen​ Berg (2012), “A Meta- on water utility benchmarking Meta-regression higher probability of finding dis- .de/32894/1/MPRA_paper_32894.pdf Regression Analysis of studies developed worldwide, analysis economies of scale and scope in Benchmarking Studies focusing on scale and scope large utilities. However, only the on Water Utilities Market economies. Using meta-re- results for scale economies are Structure.” gression analysis, the study significant. Diseconomies of scale investigates which variables and scope are more likely to be from published studies influence found in publicly owned utilities those economies. than in those that are privately owned. As would be expected, multiutilities are more likely to have scale and scope economies. table continues next page Publication Object Approach/Method Scope Main findings Accessible at: Chiplunkar, Seetharam, The report searches concrete Cases studies on good Eight Asian cities in Common elements exist for suc- https://es.scribd.com​ and Tan, eds. (2012), Good strategies for utilities to practices Thailand, Sri Lanka, cess in management, investment, /­document/211472008/Good-Practices​ Practices in Urban Water translate good principles into Objective and critical India, Malaysia, human capital recruitment, and -Urban-Water-Management Management: Decoding practice. analyses of good the Philippines, community engagement. Good Practices for a practices at the utility Cambodia, China, Successful Future. level: what worked, and Singapore what did not work, and challenges faced by utilities Church and Ware (2000), Textbook of industrial organi- Textbook Worldwide The book is a good state-of-the- Industrial Organization: A zation with extensive sections Theory and experi- art treatise. Good summary of Strategic Approach. devoted to utilities regulation ence review recent theoretical and empirical and competition policy. developments in regulation of utilities. Corton (2011), “Sector The study analyzes the structure Econometric appraisal Peru Findings indicate a cost rise of https://www.jstor.org​ Fragmentation and of the water industry in Peru, the 0.10 percent for each 1 percent /­stable/23883942?seq=1#page_scan​ Aggregation of Service existence of economies of scale, increase of joint production of _tab_contents Provision in the Water and cost inefficiency. both outputs: water lost and Industry.” water produced. Danilenko, van den Berg, The International Benchmarking Global database Worldwide The IBNET Blue Book summarizes https://openknowledge.worldbank.org​ Macheve, and Moffitt Network (IBNET) seeks to IBNET tools such as water sector development in /­bitstream​/­handle/10986/19811/978146 (2014), The IBNET Water expand access to comparative data collection instru- 2006–11, describing trends and 4802768.pdf?sequence=5 Supply and Sanitation Blue data among utilities globally, ments and protocols, monitoring effects of recent cri- Book 2014. helping to promote best practice IBNET database, and ses. Municipal water performance among water supply and sani- IBNET tariff database has improved and withstood tation providers and eventually enable enhanced accelerated urbanization and the providing consumers with access sharing of informa- impacts of the triple crisis (fuel, to high-quality and affordable tion from more than food, and finance). IBNET data water supply and sanitation 4,000 utilities from confirmed that coverage with services, by delivering access to over 130 countries water services increased and technical and financial informa- and territories water became accessible to more tion on utility performance. people. table continues next page 11 12 Publication Object Approach/Method Scope Main findings Accessible at: Danube Water Program The program’s object is to Methodological and Focus on 11 coun- The brochure describes the pro- http://www.danube-water-program.org​ (2013), “The Danube promote an informed policy descriptive document tries: Albania; gram and its activities, shares /­media/DWP_brochure-MAIL_0914.pdf Water Program: Smart dialogue around the core chal- Bosnia and some early results of collabo- Policies, Strong Utilities, lenges facing the sector and to Herzegovina; ration, presents findings and Sustainable Services.” strengthen the technical and Bulgaria; lessons derived from those activ- managerial capacity of the sec- Croatia; Kosovo, ities, and describes the program’s tor’s utilities and institutions. Macedonia, longer-term vision. FYR; Moldova; Montenegro; Romania; Serbia; and Ukraine Other countries in the region, such as Austria and Hungary Danube Water Program The Water Utility Performance Empirical study on IBNET subsample Looking at the sub-components http://www.danube-water-program.org​ (2015), Utility Performance Index (WUPI) is an aggregate utilities performance of 14 Central and of WUPI, typically aggregations /­media/publications/SoS_Report.pdf in the Danube Region: utility performance index based Eastern European have a positive effect on manage- A Review of Trends and on 10 indicators. The index is countries ment efficiency, which improves Drivers. calculated on the basis of the rather quickly after the aggrega- IBNET database. tion. In contrast, coverage indica- tors seem to worsen a few years after aggregation. Dawson, Wyckmans, This report presents integrated Case studies, theoret- Europe The report outlines priorities for http://www.ncl.ac.uk/media​ Heidrich, Köhler, Dobson, thinking across a range of urban ical approaches, and future research and development /­wwwnclacuk/ceser/files​ and Feliu (2014), systems, topics, issues, and per- reporting experience and presents a generic framework /­Understanding%20Cities.pdf Understanding Cities: spectives that are traditionally for urban integrated assessment Advances in Integrated considered separately. to analyze the potential benefits Assessment of Urban and trade-offs of sustainability Sustainability. policies and interventions. Diaz and Flores (2015), A review of the evidence of Statistical study Peru, Chile, The study finds evidence of econ- “Quick & Dirty Analysis: economies of scale in Latin and other Latin omies of scale in Latin America. The Case for Aggregation- America, based on IBNET data. American countries Water Supply and Sanitation Utilities.” table continues next page Publication Object Approach/Method Scope Main findings Accessible at: Destandau and Garcia The article integrates the out- Econometric study United States The article shows that including https://www.researchgate.net/profile​ (2014), “Service Quality, put multidimension in the cost the quality level of the deliv- /­Serge_Garcia/publication/264086779​ Scale Economies function, considering delivered ered services has a significant _Service_quality_scale_econo- and Ownership: An water volume and service quality impact on scale economies and mies_and_ownership_An_economet- Econometric Analysis of as being endogenous. Network- ownership effects. Significant ric_analysis_of_water_supply_costs​ Water Supply Costs.” related scale measures and pri- economies of scope confirm the /­links/5409dad20cf2d8daaabf99f0.pdf vate versus public ownership are existence of trade-offs between investigated with the objective water production and service of evaluating how endogenous quality. quality may affect their impact on costs. De Witte and Dijkgraaf The Dutch drinking water sector Tailored nonpara- Netherlands Authors detect a significant https://papers.ssrn.com/sol3/papers​ (2007). “Mean and Bold? experienced two drastic changes. metric model to efficiency-enhancing effect of .cfm?abstract_id=1038441 On Separating Merger In 1997, the sector association distinguish efficiency benchmarking but insignificant Economies from Structural started with a voluntary bench- effects of these two merger economies because of the Efficiency Gains in the marking, and merger activity evolutions absence of scale economies and Drinking Water Sector.” arose. the absence of increased incen- tives to fight inefficiencies. Dollery (2012), A A previous report recommended Conceptual document Australia (New The case for regionalization has http://www.usu.org.au/attachments​ Cautionary Tale from aggregation of New South Wales South Wales and lost rationale. Since the publica- /­article/381/Lessons_from_Tasmania​ Tasmania: Report on (Australia) WSS utilities, merging Tasmania) tion of the previous report, utili- _USU%20Report_Revised131112.pdf Water and Wastewater 106 local into 32 regional utili- ties gained financial sustainability, Restructuring in Regional ties. This study debates the con- which was one argument for the New South Wales. clusion of the previous report. consolidation process, but there is no evidence of economies of scale. Drapa (2009), “Access The presentation illustrates how Conceptual discussion Romania The presentation highlights http://www.oecd.org/env​ to EU Funds as an European Union funding incen- on a case study the importance of accession to /­outreach/42754000.pdf Incentive to Move Towards tivized aggregation in Romania. foreign finance to incentivize Regionalisation in Water agglomeration in Romania. Supply and Sanitation Sector of Romania.” table continues next page 13 14 Publication Object Approach/Method Scope Main findings Accessible at: Duffy (2009), “Challenges The article argues the impor- Conceptual note United States The article concludes with the http://nrri.org/wp-content​ in the Water Industry: tance of consolidating U.S. WSS need for aggregating WSS in the /­uploads/2015/06/American-Water​ Fragmented Water to increase the financial sound- United States as a way to increase -­reference-documents.pdf Systems.” ness of utilities. efficiency and reduce costs. Economic Consulting The study seeks to establish the Literature review International The study points out the impor- http://www.eca-uk.com/2016/04/28​/­in Associates (2016), “Global relationship between perfor- tance of issues addressed by stitutional-regulatory-policy-incentives Study on Institutional, mance and institutions, policies, the new institutional economy -achieve-universal-access-water-supply Policy and Regulatory and regulatory incentives. (importance of governance -sanitation/ Incentives to Improve WSS mechanisms, incentives, and Services.” the like) and formulates caveats with respect to purely tech- nocratic (normative) policy recommendations. Ehrhardt, Gandhi, Mugabi, The report draws on sector work Fieldwork and consul- India The report presents alternative https://openknowledge.worldbank.org​ and Kingdom (2015), undertaken in India to inform the tations on three rep- public-private partnership models /­handle/10986/22042 Evaluation of Water design of a water and sanitation resentative cities to meet the needs of infrastruc- Services Public Private project, in view of the difficulties ture and management of WSS in Partnership Options for of encountered by middle-size middle-size cities in India. Mid-Sized Cities in India. cities to provide sustainable services. Ehrhardt, Mugabi, The report discusses profes- Fieldwork and consul- India The report proposes professional- https://openknowledge.worldbank.org​ and Kingdom (2015), sionalization means beyond the tations on three rep- ization contracts to improve WSS /­handle/10986/22043 Professionalization traditional training and capaci- resentative cities management, including corpora- Contracts for Small ty-building approach to improve tization and pecuniary incentives Municipal Water Service management in Indian WSS for both staff and contractors in Providers in India: Business utilities. charge of training and systems. Model Development Final Report. ERM in Association with The report investigates issues Conceptual discus- International, The report detects economic http://siteresources​.­worldbank​ Stephen Myers Associates related to aggregation of water sion, case studies, and seven national case opportunities and institutional .org/INTWSS/Resources/ and Hydroconseil, and and sanitation services’ utilities lessons learned studies obstacles to aggregation. WSSWorkingNote1aggregation.pdf Kingdom (2005), Models and defines and classifies pro- of Aggregation for Water cesses by scale, scope, and char- and Sanitation Provision. acter of the aggregation process. table continues next page Publication Object Approach/Method Scope Main findings Accessible at: Farsi, Fetz and Filippini The paper explores the econo- Econometric study Switzerland The study finds considerable https://www.ethz.ch/content/dam​/­ethz​ (2007), “Economies of mies of scale and scope in the economies of scale, but at the /­special-interest/mtec/cepe/cepe-dam​ Scale and Scope in the electricity, gas, and water utili- same time great variations exist /­documents/research/cepe-wp/CEPE­​ Swiss Multi-Utilities ties and tests the convenience of between utilities because of _WP59.pdf Sector.” unbundling. unobserved heterogeneity. Feigenbaum and Teeples The central concern is to explain Econometric Study United States All estimated models suggest http://www.jstor.org/stable/1935940 (1983), “Public versus the relative cost performance that there is no difference in cost- Private Water Delivery: A of publicly owned versus pri- of-service equations for govern- Hedonic Cost Approach.” vately owned water utilities—in ment versus private companies. particular, explaining the impact of ownership form on the cost structure of firms. Ferro (2017), “América The study analyzes the institu- Policy paper Latin America The study identifies progress http://repositorio.cepal.org​ Latina y el Caribe hacia tional reforms in WSS in Latin in the WSS institutionalization /­handle/11362/41136 los objetivos de desar- America during the past 15 years with regard to various issues in a rollo sostenible en agua since Millennium Development subset of Latin American coun- y saneamiento: reformas Goals were launched. tries, analyzes them, and draws recientes de políticas lessons for the achievement of sectoriales.” Sustainable Development Goals in the coming years. Ferro and Lentini (2010), The paper systematizes some Conceptual discus- Latin America Economies of scale and scope are http://repositorio.cepal.org​/­bitstream​ “Economías de escala en concepts and experiences in sion, case studies, and mainly present in WSS in different stages /­handle/11362/3831/lcw369e​ los servicios de agua pota- Latin America and in the rest of empirical results of the process, both for works .pdf?sequence=1 ble y alcantarillado.” the world with regard to econ- and for service delivery. The omies of scale and scope in the empirical results show some case WSS. specificities. Ferro and Lentini (2012), The paper discusses how and Conceptual discussion Latin America A typology of subsidies is applied. http://www19.iadb.org/intal/intalcdi​ “Infraestructura y equidad why infrastructure services are and case studies region Reasons for subsidizing each /­PE/2012/12258.pdf social: experiencias en subsidized, emphasizing water infrastructure are identified and agua potable, saneamiento and sanitation services and pub- differentiated. Current subsidy y transporte urbano de lic transportation. Cases in Latin programs in Latin American coun- pasajeros en América American countries are studied. tries are compared. Latina.” table continues next page 15 16 Publication Object Approach/Method Scope Main findings Accessible at: Ferro, Lentini, and The survey synthesizes the Survey of empirical Worldwide Some evidence is derived from http://washdev.iwaponline.com​ Mercadier (2011), abundant empirical work on studies empirical work on increasing /­content/1/3/179 “Economies of Scale in the economies of scale and scope in economies of scale for smaller Water Sector: a Survey of the WSS. services, constant economies of the Empirical Literature.” scale in medium-size utilities, and diseconomies in very large ones. Some methodological issues are clarified concerning economies of scale measurement in WSS. Ferro, Lentini, Mercadier, The paper measures returns to Econometric appraisal Latin America There is evidence of increasing http://inventi.in/journal/issue_articles​ and Romero (2011), scale in Latin America using a returns to scale in Latin American /­impact/75/30/service-sector “Returns to Scale in Water common regional database. water provision on the basis of a and Sanitation: Estimates 2005 cross section of 90 provid- for Latin America.” ers in 14 countries. Filippini, Hrovatin, and The study estimates cost ineffi- Econometric study Slovenia Different models produce fairly https://link.springer.com​ Zorić (2008), “Cost ciency and economies of scale of robust results with respect to /­article/10.1007/s11123-007-0069-z Efficiency and Economies Slovenian water distribution util- estimates of economies of output of Scale of Slovenian ities over the period 1997–2003 density, customer density, and Water Distribution Utilities: by employing several different economies of scale. The optimal An Application of Panel stochastic frontier methods. size of a company is found to Data Stochastic Frontier closely correspond to the sample Methods.” median. Economies of scale are found in small utilities, whereas large companies exhibit disecono- mies of scale. Foster (2005), “Ten Years The paper analyzes reforms in Conceptual discussion Latin America, The paper suggests some policies https://openknowledge.worldbank.org​ of Water Service Reform in Latin America and discerns posi- Case study discussion England and based on successful English and /­handle/10986/17234 Latin America: Toward an tive and negative experiences. Wales, and France French experiences. Anglo-French Model.” Fox and Gurley (2006), Countries explore municipalities Review of theoretical International Success depends on many factors, http://www1.worldbank.org​ “Will Consolidation consolidations to deliver more arguments and empir- including institutional ones, and /­publicsector/decentralization​ Improve Sub-National cost-efficient services. ical findings on sub- is specific to each sector and its /­decentralizationcorecourse2006​ Governments?” national governments operating conditions. /­OtherReadings/FoxGurley.pdf amalgamation table continues next page Publication Object Approach/Method Scope Main findings Accessible at: Fraquelli, Piacenza, and The study investigates the Econometric study Italy The study accounts for the http://www.siepweb.it/siep/images​ Vannoni (2002), “Scope cost properties of a sample of presence of global scale and /­joomd/1399109899174.pdf and Scale Economies in Italian public utilities providing scope economies only for mul- Multi-Utilities: Evidence gas, water, and electricity in tiutilities with output levels From Gas, Water and combination. lower than those characterizing Electricity Combinations.” the median firm. Aggregation is recommended on the grounds of efficiency for small nonintegrated utilities, but it is not suggested for large multiutilities. Fraquelli and Moiso The paper analyzes the Italian Econometric Analysis Italy There is evidence of economies http://www.siepweb.it/siep/oldDoc​ (2005), “Cost Efficiency water sector, with particular due to output density for all firm /­wp/420.pdf and Economies of Scale in attention given to the industry sizes (but higher for smaller firms the Italian Water Industry.” cost efficiency and to the assess- than for larger ones). Evidence ment of scale economies at of economies of scale is found up optimal territorial level, by esti- to 90 million cubic meters or one mating a stochastic cost frontier. million population served, and diseconomies are found thereaf- ter. Scale economies suggest that the situation could be improved by reduced fragmentation at the local level. Fritz, Kaiser, and Levy The objective of this good-prac- Conceptual discussion World Bank Politics and political economy http://www.delog.org/cms/upload​ (2009), Problem-Driven tice framework is to systematize audience influence whether and how /­pdf-pea/Problem-driven-governance​ Governance and Political approaches regarding gover- Worldwide reforms happen in developing -political-economy-analysis.pdf Economy Analysis. nance and political economy and developed countries. The analysis and to provide readily emphasis of the discussion is on available orientation for World diagnosis and problem-driven Bank task team leaders and approaches. The latter comprises teams. three layers: (a) identifying the problem, opportunity, or vul- nerability to be addressed, (b) mapping out the institutional and governance arrangements and weaknesses, and (c) drilling down to the political economy drivers. 17 table continues next page 18 Publication Object Approach/Method Scope Main findings Accessible at: Frone (2008), “Factors The paper investigates issues Conceptual discussion Romania This paper draws conclusions on http://www.revecon.ro​ and Challenges of related to regionalization of WSS and application to the elements that should be pres- /­articles/2008-2/2008-2-12.pdf Regionalization in the in general and also in the partic- Romanian case ent in regionalization of the ser- Water and Wastewater ular context of Romania. vices in Romania and elsewhere. Sector.” Frone and Frone, (2012), The article discusses factors Conceptual discussion Romania The demand elasticity estimation http://ac.els-cdn.com​/­S22125671 Factors and Trends of related to efficiency in WSS and application to yields a very high value. It works 12002675/1-s2.0-S22125671120 Economic Efficiency in the (regionalization, pricing, demand Romanian case to avoid losses but jeopardizes 02675-main.pdf?_tid=­4ad6586a​ Water/Wastewater Sector. elasticity), applied to a Romanian access to consumption in rela- -49d5​-11e7-8c3e​-00000aab0f27&​ context. tively low coverage context. acdnat=1496656789_50dbe2629e​ 72381e059aa18673d92f35 Garcia, Moreaux, and The document seeks to distin- Econometric study North America The economies of vertical integra- http://www.sciencedirect.com/science​ Reynaud (2007), guish technological economies of tion are important only in small /­article/pii/S0167718706001123 “Measuring Economies vertical integration from the ver- utilities. of Vertical Integration in tical economies resulting from Network Industries: An market imperfections. Application to the Water Sector.” Garcia and Thomas The study proposes a measure Econometric study France The results reveal a positive https://link.springer​.com/article/10.1023​ (2001), “The Structure of of economies of scope to assess degree of economies of scope %2FA%3A1011142901799?LI=true Municipal Water Supply the benefits associated with joint and no short-run economies of Costs: Application to a production of water for final production density and customer Panel of French Local customers and to assess water density. Significant economies of Communities.” losses, and it proposes several scale indicate that local commu- measures of returns to evaluate nities may benefit from merging potential gains in exploiting into water districts. technological flexibility of water networks. García-Valiñas (2007), The paper analyzes the optimal Theoretical discussion Spain A decentralized scenario is pre- “What Level of division of environmental poli- with empirical appli- ferred under strong differences Decentralization Is Better cy-making functions among the cation to Spain among preferences. in an Environmental different levels of government. Context? An Application to Water Policies.” table continues next page Publication Object Approach/Method Scope Main findings Accessible at: Gibbons (2010), The article summarizes Oliver Discussion on theoret- Worldwide The article discusses well-known http://onlinelibrary.wiley.com​/­doi/10.111 “Transaction-Cost Williamson’s contributions to ical issues and appli- achievements of transaction cost 1/j.1467-9442.2010.01609.x/pdf Economics: Past, Present, transaction cost economics. cation to real-world economics and some possible and Future?” policy making future works on the topic. Gjebrea and Zoto (2013), This document discusses region- Conceptual discussion Albania Potential economies of scale exist https://www.researchgate​ Regionalization of Water alization in Albania to achieve and case study in Albania. .net/publication/287190833​ Supply and Sewerage efficiency gains. _Regionalization_of_Water_Supply_and​ Companies as a Solution _Sewerage_Companies_as_a_Solution​ for the Efficiency of Water _for_the_Efficiency_of_Water_Supply_and​ Supply and Sewerage _Sewerage_Sector_Case_of_Albania Sector: Case of Albania. Grindle (2002), “Good In proposed governance reforms, Conceptual discussion Worldwide Working toward good-enough http://onlinelibrary.wiley.com​/­doi/10.111 Enough Governance: there is little guidance about Emphasis on devel- governance means accepting a 1/j.0952-1895.2004.00256.x/pdf Poverty Reduction and what is essential and what is oping countries more nuanced understanding of Reform in Developing not, what should come first and the evolution of institutions and Countries.” what should follow, what can be government capabilities; being achieved in the short term and explicit about trade-offs and what can be achieved only over priorities; learning about what is the longer term, and what is fea- working; taking the role of gov- sible and what is not. ernment in poverty alleviation seriously; and grounding action in the contextual realities of each country. Grossman and Hart (1986), The article develops a theory Theoretical discussion International The article helps readers under- https://dash.harvard.edu/bitstream​ “The Costs and Benefits of aggregation within the firm stand ownership and optimal /­handle/1/3450060/hart_costsbenefits​ of Ownership: A Theory based on the attempt of parties level of vertical integration. .pdf?sequence=4 of Vertical and Lateral to write a contract to allocate Integration shifts the incentives Integration.” efficiently the residual control for opportunistic and distorted rights among themselves. behaviors, but it does not remove them. table continues next page 19 20 Publication Object Approach/Method Scope Main findings Accessible at: Haleblian, Devers, The article develops a framework Literature review International The article identifies patterns and http://journals.sagepub.com/doi​ McNamara, Carpenter, to organize and review recent theoretical gaps, and it provides /­abs/10.1177/0149206308330554 and Davison (2009), empirical findings, mainly from recommendations for future “Taking Stock of What We management, economics, and research aimed at developing a Know about Mergers and finance and related to mergers more integrated mergers-and-­ Acquisitions: A Review and and acquisitions. acquisitions research agenda for Research Agenda.” management scientists. Hayes (1987), “Cost The article provides an analysis Econometric study United States The study suggests evidence of https://www.researchgate.net​ Structure of the Water of vertical integration between economies of scope in selected /­publication/24072461_Cost_Structure​ Utility Industry.” retail and wholesale water sup- periods and shows that the _of_the_Water_Utility_Industry ply in the United States in order degree of economies of scope to assess economies of scope. tends to fall over time for the largest firms and increase for the smallest firms. Hempling (2009), “Multi- Many regulatory challenges are Conceptual discussion International Cross-fertilization of learning and https://studylib.net/doc/11840076​ Utility Issues at a Glance.” in fact common to all infrastruc- experience yields consistency /­multi-utility-issues-at-a-glance--scott​ ture industries. among regulatory approaches -hempling--esq.-ma within a single agency. Hodgson (2010), “Limits of This paper discusses unanswered Theoretical discussion International The paper points out the develop- https://www.researchgate.net​ Transaction Cost Analysis.” questions related to transaction ment of evolutionary approaches /­publication/253924731_Limits_of​ costs theory and its application. and the exploration of possible _­transaction_cost_analysis synthesis with competence-based theories. Holzer, Fry, Charbonneau, Consolidation of municipal Literature review United States Overall, the literature indicates http://www.newjersey.gov​ Riccucci, Henderson, Kwak, government has been studied that no compelling evidence /­dca​/­affiliates/luarcc/pdf/final​ Schatteman, and Burnash broadly and is a major area of exists for consolidation, except _­consolidation_report.pdf (2009), “Literature Review interest to control the costs of on a case-by-case basis. However, and Analysis Related to local government. the interest in consolidation has Municipal Government often triggered a review of other Consolidation.” mechanisms to provide govern- ment services efficiently and effectively. table continues next page Publication Object Approach/Method Scope Main findings Accessible at: Houtsma (2003), “Water The document considers whether Statistical analysis United States There is evidence of significant https://www.jyu.fi/ersa2003/cdrom​ Supply in California: there are significant economies (California) economies of scale in California /­papers/379.pdf Economies of Scale, Water of scale in California WSS and at water supply industry. Average Charges, Efficiency, and which population-size levels. charge levels, as proxies of Privatization.” costs of production, drop with population size beyond 10,000 and again when population size exceeds 125,000. Hunt and Lynk (1995), The paper summarizesa study Econometric analysis England and Wales There is evidence of economies http://onlinelibrary.wiley.com​ “Privatization and about regional water authority of scope between water and /­doi/10.1111/j.1468-0084.1995​ Economic Efficiency in the in England and Wales before wastewater services, and between .mp57003006.x/pdf UK Water Industry.” privatization. water supply activities and envi- ronmental ones. Iimi (2008), “(UN)Bundling The paper quantifies the optimal Econometric analysis International data- Economies of scale exist but tend http://elibrary.worldbank.org/doi​ Public-Private Partnership size of public-private partnership base on public-pri- to diminish quickly as production /­abs/10.1596/1813-9450-4459 Contracts in the Water in the sector by estimating a cost vate partnership increases, and no rationale exists Sector: Competition in function. transactions to auction contracts beyond a Auctions and Economies of certain size. Scale in Operation.” IPART (Independent The report presents an analysis Literature review International Mixed evidence is presented on https://www.ipart.nsw.gov.au/files​ Pricing and Regulatory of cost structures and industrial economies of scale, scope, and /­sharedassets/website/trimholding- Tribunal) (2007), Literature organization of the WSS industry. concentration. bay​/­final_report_-_literature_review​ Review: Underlying Costs _-_­underlying_costs_and_industry​ and Industry Structures _­structures_of_metropolitan_water​ of Metropolitan Water _industries_-_september_2007.pdf Industries. Janssens (2013), “Utility The document is a comprehen- Presentation International Pros and cons of aggregation are http://www.amac.md/obra- Aggregation and sive presentation on aggrega- presented, including governance zovanie/IAWD/2013.09.23-27​ Economies of Scale.” tion, including economic and aspects. _Benchmarking_Bucuresti/prezentari​ institutional aspects. /­Policy_Workshop/3.Wednesday/5.%20 Janssens_WB-IAWD%20Sep%2025%20 Utilities%20Aggregation%20v2.pdf table continues next page 21 22 Publication Object Approach/Method Scope Main findings Accessible at: Juuti and Katko, eds. The report explores the his- Historical analysis Europe The report alerts readers to http://www.watertime.net/docs/WP3​ (2005), Water, Time, and tory of WSS services in many inertia in decision making, which /­WTEC.pdf European Cities: History European cities and the config- limits options for future decisions. Matters for the Futures. uration of the provision of these services. Kayaga, Mugabi and The report examines institutional Conceptual discus- International The document finds inadequate https://dspace.lboro.ac.uk/dspace​ Kingdom (2013), sustainability of urban water util- sion, applied to two conceptualizations and suggests -jspui/bitstream/2134/13393/3​ Evaluating the Institutional ities and how its progress could case studies in South a new evaluation tool (the water /­JUIP-D-13-00014_revised_manuscript​ Sustainability of an Urban be tracked. Asia utility maturity model). .pdf Water Utility: A Conceptual Framework and Research Directions. Kerr and Kominers (2012), The article models special clus- Model design and United States The article identifies agglom- https://papers.ssrn.com/sol3/papers​ “Agglomerative Forces and ters of similar firms. empirical test in erative forces in the shaping of .cfm?abstract_id=2097819 Cluster Shapes.” Silicon Valley industries’ structures and size. Kim and Clark (1988), The paper seeks to estimate Econometric analysis United States The paper finds evidence of http://www.sciencedirect.com/science​ “Economies of Scale and economies of scale and scope constant returns to scale for the /­article/pii/0166046288900221 Scope in Water Supply.” in the United States for a cross average firm producing water section of 1973. for both residential and nonresi- dential customers; diseconomies of scale in supplying water to residential customers; economies of scale in providing water for nonresidential customers; and economies of scope for the aver- age utility supplying services for residential and nonresidential customers. table continues next page Publication Object Approach/Method Scope Main findings Accessible at: Kim and Lee (1998), The article estimates econo- Econometric analysis South Korea The article finds economies of http://onlinelibrary.wiley.com​ “Spatial Integration of mies of scale in water supply scale given the average size of /­doi/10.1111/j.1467-940X.1998​ Urban Water Services and for a panel of municipal WSS the firms. But decomposing the .tb00084.x/full Economies of Scale.” companies. results, there is evidence of dis- economies of scale in 4 cities, constant economies of scale in 12 cities, and economies of scale in another 12. Kingdom, Baietti, and The presentation explores the Results from 11 case International The presentation identifies char- http://siteresources.worldbank.org​ van Ginneken (2006), need for public utilities reforms. studies acteristics of well-performing /­INTWSS/Resources/utilities.pdf “Reforming Public water utilities. Utilities.” Klien (2016), “Utility The paper analyzes the consol- Empirical study on 14 Eastern Europe The paper yields that merging https://extranet.sioe.org/uploads​ Governance and Why idation processes of the WSS in countries of Eastern utilities will not necessarily result /­sioe2016/klien.pdf Consolidations May Not Eastern European countries. Europe in lower unit costs. Consolidation Deliver: Lessons from not only increases the water vol- Central and Eastern ume delivered or the number of Europe.” customers but also implies adding areas (municipalities, systems, or scarce territories). The results show economies of scale but cost increases in actual consolidations. Komives, Foster, Halpern, The study analyzes subsidies Conceptual discussion International Good practices are found, and http://documents.worldbank.org​ Wodon, and Abdullah for WSS and electricity, their and case studies policy recommendations derive /­curated/en/606521468136796984​ (2005), “Water, Electricity, rationale, and their efficiency from the conceptual and empiri- /­Water-electricity-and-the-poor​ and the Poor: Who and equity consequences, and it cal discussion. -who-benefits-from-utility-subsidies Benefits from Utility discusses relevant examples. Subsidies?” table continues next page 23 24 Publication Object Approach/Method Scope Main findings Accessible at: Kommunalkredit Public The report analyzes the process Conceptual discussion Eastern Europe The report points out the unde- https://www.publicconsulting.at/eng​/­an Consulting (2009), Report of overfragmentation in WSS and case studies (Poland, Romania, sirable consequences of the nual-reports-and-publications.html on Measures to Cope with sectors in Eastern Europe after and Ukraine) decentralization processes. It Over-Fragmentation in the 1990s. Additionally, exam- suggests taking advantage of the the Water Supply and ples of case studies experience accumulated in inter- Sanitation Sector. from Western municipal cooperation in Western Europe (France and Europe. Austria) Locussol and Fall (2009), The primary objective of the Conceptual and International The paper summarizes recom- http://documents.worldbank.org​ “Guiding Principles for paper is to provide practical applied discussion mendations for designing and /­curated/en/577041468336294886​ Successful Reforms of guidance to World Bank teams implementing reforms of WSS /­Guiding-principles-for- Urban Water Supply and advising on the design and sectors. successful​-reforms-of-urban-water​ Sanitation Sectors.” implementation of reforms of -supply-and-sanitation-sectors urban water supply and sanita- tion sectors. Martins, Fortunato, The paper focuses on the conse- Empirical study Portugal The paper states that it would be https://estudogeral.sib.uc.pt​ and Coelho (2006), quences of water-loss reduction cost-efficient to leave a certain /­handle/10316/11747 “Cost Structure of the and the management of water level of losses instead of repairing Portuguese Water Industry: resources based on their avail- all leakages. A Cubic Cost Function ability at an integrated river-ba- Application.” sin level. Martins, Coelho, and The paper concentrates on Econometric analysis Portugal Concentrating the Portuguese http://gemf.fe.uc.pt/workingpapers​ Fortunato (2008), “Water determining the optimal level water and sanitation sector, the /­pdf/2008/gemf_2008-06.pdf Losses and Hydrographical of water-loss reduction in a costs of water-loss control do Regions Influence on context of efficient river basin not seem to be systematically the Cost Structure of management. influenced by the hydrographical the Portuguese Water region to which water utilities Industry.” belong. Mbuvi (2012), “Utility Governance and reforms are ana- Doctoral dissertation Uganda and Private utilities seemed to be https://www.merit.unu.edu/training​ Reforms and Performance lyzed for West African countries. Conceptual discussion Zambia for institu- more efficient. An identification /­theses/MBUVI_Dorcas.pdf of the Urban Water Sector Efficiency analysis is performed. and empirical work tional aspects and analysis of key governance in Africa.” Various African issues are developed. countries for the empirical studies table continues next page Publication Object Approach/Method Scope Main findings Accessible at: Mercadier, Cont, and Ferro The paper quantifies economies Econometric study Peru No economies of scale are found https://link.springer.com/ (2016), “Economies of of scale in WSS sector in Peru. in the Peruvian WSS sector as a article/10.1007/s11123-016-0468-0 Scale in Peru’s Water and whole. Nevertheless, there are Sanitation Sector.” economies of production density (volume) and customer density (connections), and some agglom- erations are potentially cost saving. Mitchell and Campbell The report explores synergies Conceptual discussion Australia and The report yields conceptual https://opus.lib.uts.edu.au​ (2004), Synergy in the between water, wastewater, and international aids for analysis and policy /­handle/10453/12404 City: Making the Sum of the stormwater within a sustainabil- intervention. Parts More Than the Whole. ity perspective. Mitchell, Retamal, Fane, The paper discusses the issue Conceptual discussion Australia and The paper makes recommen- https://www.researchgate.net​ Willetts, and Davis of decentralization and its driv- Case studies United States dations on the next steps /­publication/237450180_CREATING​ (2008), “Decentralised ers and enablers. It compares Australia might take concerning _CONDUCIVE_INSTITUTIONAL​ Water Systems—Creating tendencies between the United institutional arrangements for _ARRANGEMENTS Conducive Institutional States and Australia. decentralization. Arrangements.” Mizutani and Urakami The study estimates three differ- Econometric study Japan The study finds diseconomies http://unpan1.un.org/intradoc​ (2001), “Identifying ent cost functions for the WSS of scale for the sample mean. /­groups​/­public/documents/apcity​ Network Density and in Japan. The study also determines the /­unpan043954.pdf Scale Economies for optimal size for a utility in terms Japanese Water Supply of network length, volume of Organizations.” distributed water, and supplied population. Monteiro (2009), “Water This work is a contribution to the Doctoral dissertation Portugal The study finds diseconomies of http://www.repository.utl.pt​ Tariffs: Methods for an study on how the Portuguese scale and scope for the average /­handle/10400.5/1541 Efficient Cost Recovery and water industry can meet the water utility. Both types of econ- for the Implementation goals of cost recovery and water omies are more likely to happen of the Water Framework use efficiency set out by the for utilities with a large customer Directive in Portugal.” Water Framework Directive. It base. estimates a multioutput cost function for the Portuguese water industry at retail level. table continues next page 25 26 Publication Object Approach/Method Scope Main findings Accessible at: Nauges and van den Berg Using panel data, the paper Econometric study Moldova, Brazil, The study finds economies of https://openknowledge.worldbank.org​ (2008), “Economies of seeks to detect the presence Vietnam, and scale in Moldova, Vietnam, and /­handle/10986/4803 Density, Scale and Scope of economies of scale in four Romania Romania, and it cannot reject con- in the Water Supply and countries. stant economies of scale in Brazil. Sewerage Sector: A Study Cost structures vary significantly of Four Developing and between and within countries. Transition Economies.” North (1990), Institutions, The book develops an analytical Conceptual and theo- Worldwide The book maintains that insti- https://books.google.com​ Institutional Change and framework to explain which retical discussion tutions exist because of the .ar/books/about/Institutions​ Economic Performance. institutions and institutional uncertainties involved in human _Institutional_Change_and​ changes affect the performance interactions. They are the con- _Ec.html?id=oFnWbTqgNPYC&source=​ of economies, both at a given straints devised to structure that kp_cover&redir_esc=y time and over time. interaction. It explains the role of transaction and production costs in institutions’ development. It also explains the implications of that analysis for economic theory and economic history, indicating how institutional analysis must be incorporated into neoclas- sical theory and exploring the potential for the construction of a dynamic theory of long-term economic changes. O’Meally (2013), “Mapping The resource paper focuses on Literature review, case Worldwide The paper offers an initial tool http://siteresources.worldbank​ Context for Social the issue of social accountabil- studies, and consulta- to guide thinking, analysis, and .org/EXTSOCIALDEVELOPMENT​ Accountability: A Resource ity and context, arising from a tion with experts programming. /­Resources/244362-1193949504055​ Paper.” growing recognition that con- /­Context_and_SAcc_RESOURCE_PAPER​ text is critical in shaping and .pdf making social accountability interventions. table continues next page Publication Object Approach/Method Scope Main findings Accessible at: Perrin, Thorau and The paper provides background Conceptual discussion Canada (British The paper discusses what reg- http://www.cscd.gov.bc.ca/lgd​/­policy​ Associates Ltd. (2005), context to support a discus- Columbia) ulation is and how it imposes _research/library/Harmonization_of​ “Background Paper: sion about regulation, service costs and provides benefits, with _Regulation_Paper.pdf Harmonization of delivery, and economic devel- particular emphasis on the costs Regulation, Service opment as three key elements of duplication and overlap as the Delivery and Economic of the business friendliness in a rationale for regulatory harmoni- Development.” community. zation. The paper also discusses how those concepts can apply to government services and eco- nomic development policy. It also describes and discusses a range of initiatives undertaken by local governments in several jurisdic- tions related to the harmonization of regulation, service delivery, and economic development. Pinto, Simões, and Despite several reforms, the Econometric analysis Portugal Concerning the operational http://tandfonline.com/doi​/­abs/10.108 Marques (2016), “Water Portuguese water sector still environment, it was possible to 0/1573062X.2016.1254254?journalCod Services Performance: Do reveals significant levels of inef- observe a positive influence of e=nurw20 Operational Environment ficiency, partially caused by an private sector participation, econ- and Quality Factors inappropriate operating scale. omies of scope, and groundwater Count?” sources on efficiency. Pollitt and Steer (2012), Many studies on water and sew- Literature review and England and Wales A reexamination of the early lit- http://www.sciencedirect.com/science​ “Economies of Scale erage industries place significant conceptual discussion erature on scale and scope econ- /­article/pii/S0957178711000865 and Scope in Network importance on the benefits of omies finds that those studies do Industries: Lessons for the economies of scale and scope, not implicitly preclude noninte- UK Water and Sewerage and on how these relate to verti- grated firms from making full use Sectors.” cally integrated firms. of assets for multiproduct activi- ties. Nonintegrated firms can still reap scope economies through trading in the open market. The authors suggest that there are difficulties in separating these two types of economies when assessing firm performance. table continues next page 27 28 Publication Object Approach/Method Scope Main findings Accessible at: Prieto, Zofio, and Álvarez The article estimates a cost Econometric analysis Spain The article finds significant econ- http://www.ief.es/documentos/recursos​ (2009), “Economías de function seeking economies of omies of scale and density, but /­publicaciones/revistas/hac_pub/190​ escala, densidad and alca- scale, density, and scope and there is no evidence of economies _ART_3.pdf nce en la provisión pública seeking the optimal size for of scope. Only 10 percent of the de infraestructura básica municipalities. municipalities from the analyzed municipal.” region reach optimal size; thus, there is considerable room for aggregation to achieve economies of scale and density. Puga (2009), “The The paper reviews what is known Literature review International Despite the broad agreement https://www.newyorkfed.org/mediali- Magnitude and Causes about the magnitude and causes on the magnitude of agglom- brary/media/research/conference/2009​ of Agglomeration of the productive advantages of eration economies at the urban /­jrs/Puga.pdf Economies.” cities and also tries to identify level, the literature has been far the largest knowledge gaps on less successful at distinguishing agglomeration economies. between possible sources. Doing so requires models that use micro-foundations to help iden- tify and distinguish features, and it requires empirical work that carefully exploits those features for identification. Renzetti (1999), “Municipal Municipal water supply and Econometric analysis Canada (Ontario) Prices charged to residential and https://www.researchgate.net​ Water Supply and Sewage sewage treatment utilities in commercial customers are found /­publication/4934570_Municipal_Water​ Treatment: Costs, Prices, Ontario, Canada, are studied to to be only one-third and one- _Supply_and_Sewage_Treatment_Costs​ and Distortions.” establish their supply costs and sixth of the estimated marginal _Prices_and_Distortions evaluate their pricing practices. cost for water supply and sewage The estimated cost parameters treatment, respectively. are combined with estimated residential and nonresidential demands functions to calculate approximate welfare losses that arise from overconsumption. table continues next page Publication Object Approach/Method Scope Main findings Accessible at: Revollo-Fernández and The study tests the presence of Econometric analysis Colombia The study finds economies of https://economia.uniandes.edu.co​ Londoño (2010), “Análisis economies of scale and scope scale and scope for water and /­images/archivos/pdfs/Articulos_Revista​ de las economías de escala in Colombia, where WSS is very sewerage services in Colombia, _Desarrollo_y_Sociedad/Articulo66_5.pdf y alcance en los servicios atomized, through the esti- which can be used to design de acueducto y alcan- mation of Cobb-Douglas and policies to improve efficiency in tarillado en Colombia” translog cost functions. service provision and resources’ [“Analysis of economies of conservation. Medium and small scale and scope in water companies have greater econo- supply and sanitation ser- mies of scale than large compa- vices in Colombia”]. nies do. Ringskog (2012), “The The evolution of WSS in Latin Historical and statisti- Five Latin Each of the five countries offers Evolution of Urban America has been tracked for at cal study American countries valuable lessons from the policies Sanitation in Latin least the past one hundred years (Argentina, Brazil, and implementation of its urban America.” to identify and understand the Chile, Colombia, sanitation programs. drivers for urban sanitation and and Mexico) learn the pertinent lessons for application elsewhere. Saal and Parker (2001), The paper analyzes the extent Econometric analysis England and Wales Evidence exists that the mean https://link.springer.com​/­article/10.1023 “Productivity and Price of economies of scale and scope water and sanitation company is /A:1011162214995 Performance in the as well as the impact of privat- characterized by diseconomies Privatized Water and ization and economic regulation of scale. Economies of scope Sewerage Companies of on economic efficiency, over a between water and sanitation are England and Wales.” sample of water and sewerage not found. companies. table continues next page 29 30 Publication Object Approach/Method Scope Main findings Accessible at: Saal, Arocena, Maziotis, The paper surveys the literature Literature review Worldwide There is considerable evidence of https://www.degruyter.com/view/j​ and Triebs (2013), “Scale on scale and scope economies in vertical scope economies between /­rne.2013.12.issue-1/rne-2012-0004/rne​ and Scope Economies and the water and sewerage industry. upstream water production and -2012-0004.xml?format=INT the Efficient Vertical and distribution. There is only mixed Horizontal Configuration evidence on the existence of (dis) of the Water Industry: A economies of scope between Survey of the Literature.” water and sewerage activities. Economies of scale exist up to a certain output level, and disec- onomies of scale arise if the com- pany increases its size beyond this level. The optimal scale of util- ities varies considerably among countries. Vertical unbundling is costly in comparison with pro- viding water services with a fully integrated water company. Saal, Parker, and The study estimates the pro- Econometric analysis England and Wales Evidence exists that the average https://www.jstor.org​ Weyman-Jones (2007), ductivity performance of WSS water and sanitation company is /­stable/41770331?seq=1#page_scan_tab​ “Determining the in England and Wales before characterized by diseconomies _contents Contribution of Technical and after privatization using a of scale. Change, Efficiency Change quality-adjusted input distance and Scale Change to function. Productivity Growth in the Privatized English and Welsh Water and Sewerage Industry: 1985–2000.” table continues next page Publication Object Approach/Method Scope Main findings Accessible at: Sauer (2005), “Economies The article focuses on modeling Econometric analysis Germany The findings deliver evidence on http://onlinelibrary.wiley.com​ of Scale and Firm Size and analyzing the cost structure the hypothesis that the legally /­doi/10.1029/2005WR004127/pdf Optimum in Rural Water of water supply companies. set supplying areas, on the basis Supply.” of public administrative criteria as well as local characteristics of water resources, are economically inefficient. Hence, structural inef- ficiency in the rural water sector is confirmed to be policy induced. SCL Econometrics (2009), The study seeks to analyze Econometric analysis Chile In the production stage, there https://es.scribd.com​ “Cuantificación de las quantitatively the magnitude of are economies of scale during the ­ uantificacion​ /­document/142219667​/C economías de escala en el economies of scale at various whole period analyzed, whereas -de-Economias-de-Escala sector sanitario.” WSS stages in Chile. The cost there are none in water distribu- information comes from the tar- tion and wastewater collection iff determination processes. stages. There are economies of scale in wastewater treatment and in administrative stage during the whole period analyzed. Economies of density are found for the largest and medium- size providers but not for the small ones. Using a data panel, econo- mies of scale are found at indus- try level. Shih, Harrington, Pizer, Small water systems face Econometric analysis United States Smaller systems tend to face https://www.awwa.org/publications​ and Gillingham (2006), increasingly stringent environ- higher unit production costs /­journal-awwa/abstract/articleid/15520​ “Economies of Scale mental regulations, and the across the full range of produc- .aspx in Community Water question is whether the services’ tion inputs. Size explains only a Systems.” providers can afford the increas- part of cost differences; ineffi- ing costs due to those regula- ciency is the key to explaining the tions, without amalgamation. rest of cost differences. Two data sets are examined to evaluate costs. table continues next page 31 32 Publication Object Approach/Method Scope Main findings Accessible at: Shirley, Xu, and Zuluaga The paper studies the regulatory Conceptual discussion Chile The paper concludes that the https://papers.ssrn.com/sol3/papers​ (2000), “Reforming Urban reforms affecting a Santiago WSS particular Chilean political institu- .cfm?abstract_id=629141&rec=​ Water Supply: The Case of provider. tions enabled important restruc- 1&srcabs=630683&alg=7&pos=7 Chile.” turing and efficient reforms before privatization. Stone and Webster The report estimates models of Econometric study England and Wales The report finds evidence of https://www.researchgate.net​ Consultants (2004), WSS costs both for water and diseconomies of scale for the /­publication/42363732_Investigation​ “Investigation into sewerage companies and for average-size water and sewer- _into_evidence_for_economies_of_scale​ Evidence for Economies water-only companies after their age company, declining over the _in_the_water_and_sewerage_industry_in​ of Scale in the Water and privatization. period of analysis. It also finds _England_and_Wales Sewerage Industry in small or negligible economies of England and Wales.” scale for the average-size water- only companies. Strategic Management The report discusses technical Conceptual discussion England and Wales The report concludes that tech- Consultants (2002), and organizational factors under- nical economies of scale are Optimum Entity Size in the lying economies of scale. exhausted at about 400,000 Water Industry of England connections. and Wales: a Review of the Factors Which Influence the Size of Companies. Thiel (2009), The paper provides a theory-­ Conceptual discussion Portugal The case study shows the role of http://www.water-alternatives​.org​ “Europeanisation and informed account of the way in European policies in restructuring /­index.php/alldoc/articles/vol2​ the Rescaling of Water which water service provision has the spatiotemporal order in the /­v2issue2/53-a2-2-4/file Services: Agency and State been physically and institution- Algarve and strengthening the Spatial Strategies in the ally restructured in the Algarve, influence of the national state Algarve, Portugal.” Portugal over the years. within the region. A consequence has been that water quality, sewage treatment, and reliability of services have improved sig- nificantly in line with European requirements. table continues next page Publication Object Approach/Method Scope Main findings Accessible at: Torres and Morrison-Paul The paper empirically analyzes Empirical analysis United States The estimates reveal considerable https://www.researchgate.net​ (2006), “Driving Forces the structure of the U.S. water scale economies in terms of vol- /­publication/223849302_Driving_Forces​ for Consolidation or industry, using a multiproduct ume, particularly for small utilities _for_Consolidation_or_Fragmentation_of​ Fragmentation of the US flexible cost function model with that tend to have less output _the_US_Water_Utility_Industry_A_Cost​ Water Utility Industry: A the amount of water delivered density. These economies are, _Function_Approach_with_Endogenous​ Cost Function Approach to final consumers recognized as however, counteracted by simul- _Output with Endogenous Output.” endogenous. The cross-sectional taneous increases in customer econometric analysis focuses on base and service area size, espe- measures of cost economies in cially for large utilities. The results water production and their varia- indicate that consolidation of tion with network characteristics. small utilities might generate cost efficiencies, depending on the associated expansion of the net- work, but consolidation of already large utilities without correspond- ing increases in output density is not likely to be cost effective. Trémolet and Binder Water and sanitation services, Conceptual document Worldwide, with There is no single model; each of http://www.tremolet.com/publications​ (2010), “The Regulation which qualify as essential public Literature review emphasis on devel- these systems has its advantages /­regulation-water-and-sanitation-serv of Water and Sanitation services, need to be regulated oping countries and limitations. The systems ices-dcs Services in DCs.” from an economic, environ- must be tailored to the specific mental, and public health point circumstances to adapt to the of view. Economic regulation institutional context and meet the of such services includes tar- needs of all consumers, including iff regulation, service quality, the poorest. This work reviews competition, and, in some existing knowledge on these cases, consumer protection. issues and identifies areas for Institutional models for carry- research to improve current prac- ing out such regulation include tices, particularly in developing self-regulation, regulation by countries. contract, and regulation by agency, as well as some hybrid models that combine regulation by contract and by agency and rely on external expert panels or user participation. table continues next page 33 34 Publication Object Approach/Method Scope Main findings Accessible at: Tsegai, Linz, and Kloos Using data gathered from the Econometric analysis South Africa As evidenced by estimation http://ageconsearch.umn.edu​ (2009), “Economic National Treasury of South results of returns to scale (greater /­record/49926 Analysis of Water Supply Africa, the paper examines the than one), merger of WSAs would Cost Structure in the structure of water supply costs be economically advantageous. Middle Olifants Sub-Basin and tariffs of Water Service Hence, reversing the process of South Africa.” Authorities (WSAs) in the Middle of transferring water services’ Olifants sub-basin of South authority to “local” municipality Africa. Using the translog cost level and thus upscaling WSAs function method, the marginal into the “district” municipality cost of water supply and econo- level is an important policy option mies of scale are estimated. for improving water services efficiency in the Middle Olifants sub-basin of South Africa. Tynan and Kingdom The study estimates economies Econometric analysis International The study finds mixed results, but http://siteresources.worldbank.org​ (2005), “Optimal Size for of scale in WSS of different (African countries, in general, economies of scale are /­INTWSS/Resources/optimalsize.pdf Utilities? Returns to Scale countries. Indonesia, Peru, present at least until a population in Water: Evidence from United States, and of 125,000 inhabitants is served. Benchmarking.” Vietnam) Urakami (2005), Utilities with different degrees Econometric analysis Japan The results suggest that econo- http://www-sre.wu-wien.ac.at/ersa​ “Identifying Scale of vertical integration are mies of vertical integration exist /­ersaconfs/ersa05/papers/370.pdf Economies for Different studied, and scale economies between upstream water produc- Types of Water Supply for each type of water supply tion activities and water delivery, Organizations in Japan.” organization are estimated using meaning that water supply sys- translog cost function. Water tems can achieve cost efficiency sources are considered because from vertical integration. This is water sources differences might particularly true for firms with a affect the cost structure of water low purchased water ratio (pur- supply systems. chased water relative to water delivered). table continues next page Publication Object Approach/Method Scope Main findings Accessible at: Urban Systems Ltd. The discussion paper examines Conceptual discussion Canada (British The discussion paper outlines http://www.cscd.gov.bc.ca/lgd​/­policy​ (2005), “Background two opportunities that are avail- Columbia) some broad trends and factors _research/library/Best_Practices_for​ Paper: Best Practices for able to local government for that are prompting an increased _Moving_Toward_Change.pdf Moving Toward Change increasing the effectiveness and emphasis on regional and alterna- in the Delivery of Local efficiency of local government tive service delivery. It also iden- Government Services.” service provision. These include tifies both the opportunities and the delivery of local government the obstacles to the increased use services on a regional basis and of these service delivery models the use of service delivery mod- by local government. In addition, els other than direct provision the paper discusses some best and production of local govern- practices that should be consid- ment services by local govern- ered by local government in the ment staff (called “alternative provision of services using the service delivery”). regional and alternative service delivery models. van den Berg and Utilities around the world look Database and meth- Worldwide IBNET serves as a global yardstick https://openknowledge.worldbank.org​ Danilenko (2011), Water ever more urgently for ways to odology for utilities with which utilities and national /­handle/10986/2545 Supply and Sanitation improve their performance and benchmarking policy makers—as well as the Performance Blue provide better services at the public, governments, municipali- Book: The International lowest possible cost. One effec- ties, utilities, investors, and other Benchmarking Network tive means for accomplishing users—can compare and evaluate for Water and Sanitation this is by comparing their perfor- the performance of water and Utilities Databook. mance with that of similar utili- wastewater utilities throughout ties elsewhere. As a result, water the world. and wastewater utilities require a source of comprehensive, reli- able data as a basis for meeting their constituents’ demands for high-quality services. table continues next page 35 36 Publication Object Approach/Method Scope Main findings Accessible at: Van den Berg and The report looks at how African Statistical analysis 14 African In general, utility performance https://openknowledge.worldbank.org​ Danilenko (2017), utilities are performing. It uses a countries in Africa is weak, although there /­bitstream/handle/10986/26186/113075​ Performance of Water data panel of about 120 utilities are well-performing utilities. -WP-P151799-PUBLIC-WeBook​ Utilities in Africa: in low- and middle-income coun- On the basis of the data panel, .pdf?sequence=6 tries in Africa, which represent the performance of African util- about 53 percent of the urban ities shows some improvements population served by piped between 2010 and 2013. As water network services and covering tariffs virtually everywhere are 14 countries in different parts set on the basis of the operation of Africa. expenses, controlling costs is a major element in making the ser- vice more affordable. Vergès (2010), The report analyzes the adminis- Conceptual discus- International The comparative analysis allows http://repositorio.cepal.org​ Experiencias relevantes de trative-territorial level of public sion, case studies readers to identify lessons from /­handle/11362/3790 marcos institucionales y authorities responsible for WSS, national experiences intended for contratos en agua potable the legal nature of providers, the institutional development of y alcantarillado. and the type of contract or the WSS sector. license regulating the conduct of the providers. Villaverde Hernández and This study estimates economies Econometric analysis Peru The study finds that only 20 http://www.academia.edu/7848366​ Cadillo La Torre (2014), of scale and minimum efficient percent of the utilities in the sam- /­Econom%C3%ADas_de_escala_en_la​ “Economías de escala en la scale from a sample of 49 ple have output levels equal or _prestaci%C3%B3n_de_servicios_de​ prestación de servicios de Peruvian WSS utilities. superior to the minimum efficient _agua_potable_y_alcantarillado_en_el​ agua potable y alcantaril- scale. _Per%C3%BA lado en el Perú: El caso de las empresas prestadoras de servicios de sanea- miento (EPS) municipales.” table continues next page Publication Object Approach/Method Scope Main findings Accessible at: Van Ginneken and The report presents a framework Conceptual discussion Worldwide Well-functioning utilities share http://documents.worldbank.org​ Kingdom (2008), “Key of attributes of well-functioning and case studies common attributes: autonomy /­curated/en/604331468138275645/Key​ Topics in Public Water utilities and how they have intro- (being independent to manage -topics-in-public-water-utility-reform Utility Reform.” duced key institutional changes. professionally without arbitrary It aims to help water and sanita- interference by others); account- tion sector practitioners choose ability (being answerable to other and apply public utility reform parties for policy decisions, for approaches. the use of resources, and for per- formance); and being consumer oriented (reporting and listening to clients and working to better meet their needs). Wenban-Smith (2009), The interaction between produc- Doctoral dissertation England and Water distribution costs are ana- http://etheses.lse.ac.uk/285/1/Wenban​ “Economies of Scale, tion costs and distribution costs Wales, United lyzed using a new measure of -Smith_Economies%20of%20scale%20 Distribution Costs and at settlement level is investi- States water distribution output (which distribution%20costs%20and%20den- Density Effects in Urban gated using data from England combines volume and distance) sity%20effects%20in%20urban%20 Water Supply: A Spatial and Wales and from the United and modeling distribution areas water%20supply.pdf Analysis of the Role of States. Plant-level economies as monocentric settlements. Unit Infrastructure in Urban of scale in water production are distribution costs are shown to Agglomeration.” confirmed and quantified. be characterized by scale econo- mies with respect to volume but by diseconomies with respect to average distance to properties. It follows that higher settlement densities reduce unit distribution costs, whereas lower densities increase them. table continues next page 37 38 Publication Object Approach/Method Scope Main findings Accessible at: Williamson (1995), Institutions are important, yet Conceptual discussion Worldwide The article assesses the efficacy http://documents.worldbank.org​ “The Institutions and they are persistently neglected of the de facto (as against the /­curated/en/333731468739202982​ Governance of Economic in the planning process. The de jure) institutional environ- /­The​-institutions-and-governance-of​ Development and Reform.” article takes a bottom-up, micro- ment with respect to credible -economic-development-and-reform analytic approach to economic commitments. development and reform. It examines the governance of contract, investment, and private ordering through the lens of transaction-cost economics. Williamson (1999), “Public The article examines public Conceptual discussion Worldwide There is an efficiency level for http://carecon.org.uk/Chula/1999%20 and Private Bureaucracies: bureaucracy through the lens and case study on the public bureaucracy, and every Williamson.pdf A Transaction Cost of transaction cost econom- U.S. State Department mode of governance should be Economics Perspective.” ics, according to which public kept in its efficient level, where it bureaucracy, like other alter- reveals comparative advantage. native modes of governance, is well suited for some transactions and poorly suited for others. Williamson (2009), The lecture synthesizes the Conceptual discussion Worldwide Governance is the overarching http://www.nobelprize.org/nobel_prizes​ “Transaction Cost research programs described as concept, and transaction cost /­economic-sciences/laureates/2009​ Economics: The Natural the “economics of governance,” economics is the means by /­williamson_lecture.pdf Progression.” the “economics of organization,” which operational content can or “transaction cost economics.” be brought into governance and organization. Transaction cost economics entails examining eco- nomic organization through the lens of contract rather than the neoclassical lens of choice. table continues next page Publication Object Approach/Method Scope Main findings Accessible at: Williamson (2014), The article seeks to synthesize Conceptual discussion Worldwide Transaction cost economics has http://www.mnje.com/sites/mnje.com​ “The Transaction Cost the approach of transaction cost many applications, not only within /­files/07-12_williamson.pdf Economics Project.” economics. the field of industrial organiza- tion but also within most applied fields of economics, including labor, public finance, comparative economic systems, and eco- nomic development and reform. Applications to business are like- wise numerous. Applications to the contiguous social sciences also have been made. Any problem that originates as or can be refor- mulated as a contracting problem can be examined in transaction cost–economizing terms. Wolters (2013), The presentation analyzes the Case discussion The Netherlands The presentation recommends http://www.amac.md/obrazovanie​ “Aggregation/ Dutch experience of cooperation mergers as a way to achieve /­EXPOAPA/2013.06.10-12​_EPOAPA-2013/ Regionalisation/ and consolidation in the WSS synergies and economies of scale prezentari/WorkShops​/­Performance%20 Consolidation of Water services. in specific functions, to form Measurement%20and%20 Utilities: Observations coalitions for addressing specific Regionalization%20of%20Water%20 from the Netherlands.” challenges, and to make joint Utilities/02.%20PresentationRomania- purchases. final(June%202013).pdf Zschille (2012), Focusing on a hypothetical Empirical analysis Germany Highest efficiency improvement http://cepr.org/active/publications​ “Consolidating the Water restructuring of the industry, the potentials turn out to result from /­discussion_papers/dp.php?dpno=8737 Industry: An Analysis of study applies data envelopment reducing individual inefficiencies. the Potential Gains from analysis to analyze the potential The majority of the 84 merger Horizontal Integration in efficiency gains from mergers cases analyzed are characterized by a Conditional Efficiency between water utilities at the merger gains. The results suggest Framework.” county level. improving incentives for efficient operations in water supply and con- solidating the industry structure. Zschille and Walter (2010), This article uses data envelopment Empirical analysis Germany The study finds large differences https://www.diw.de​/­documents​ “Cost Efficiency and analysis and stochastic frontier in technical efficiency scores even /­vortragsdokumente/220​ Economies of Scale and analysis to determine the utilities’ after accounting for significant /­diw_01.c.364475.de/v_2010_zschille​ Density in German Water technical efficiency scores based on structural variables such as net- _cost_napw.pdf 39 Distribution” cross-sectional data from 373 public work density, share of groundwa- and private water utilities in 2006. ter usage, and water losses. © 2017 International Bank for Reconstruction and Development / The World Bank. Some rights reserved. 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