Regulating Natural Monopolies in Canada: An Introduction to 'Regulatory Failure and Renewal: The Evolution of the Natural Monopoly Contract', by John R. Baldwin

Infrastructure services in energy, transport, water, and telecommunications services underpin the wealth of modern nations. Yet inefficiencies abound. In developing nations hundreds of millions of people lack access to modern infrastructure services. Globally, as much as 40 percent of expenditures on infrastructure may constitute waste, equivalent to some 1 to 2 percent of global GDP. Natural monopoly features and sunk costs provide incentives for the parties to infrastructure ventures to play ransom games. Particularly in developing economies prices are often well below cost. Hence investors shy away and access remains limited. Government involvement in project choice and implementation may lead to ‘white elephants’ and mismanagement. Where head-to-head competition can be introduced, such as in modern telecommunications systems, the syndrome can be kept in check. Yet where such competition is not feasible, policymaking and inevitable price and quality regulation remain a challenge, requiring patient effort at arm’s-length from day-to-day political pressures.

Download Full-text

Legal Aspects of Urban Water and Sanitation Regulatory Services: An Analysis of How the Spanish Experience Positively Would Contribute to the Brazilian New Regulation

Water ◽

10.3390/w13081023 ◽

2021 ◽

Vol 13 (8) ◽

pp. 1023

Author(s):

Asensio Navarro Ortega ◽

Rafael Burlani Neves

Keyword(s):

Service Management ◽

Legal Aspects ◽

Natural Monopoly ◽

Wastewater Management ◽

Urban Water ◽

Water Services ◽

Public Intervention ◽

Economic Point ◽

General Terms ◽

Urban Water Services

This paper focuses on the legal and institutional framework of urban water services in Spain, emphasizing water sanitation by using proposals that would positively contribute to wastewater management in Brazil. The recent Brazilian Federal Law No. 14,026/20 aims to encourage investment in water sanitation, promoting public-private collaboration formulas so that service management is viable even in economically less-favored regions. In Spain, sanitation policies are aimed at fulfilling the set of obligations and objectives imposed by European Union Directives within the environmental policies of the Union. From an economic point of view, supply and sanitation water services are classified at European legal framework as “services of general economic interest” (SGEI), not subject to harmonized regulation and open to a natural monopoly provision regime, which they admit various types of management formulas, public and private, based on the ownership and public intervention of the service, both at national and European level. We believe that the Spanish experience in this field, beyond its singularities, can serve as a useful reference for Brazilian’s urban wastewater new regulation for several reasons: (1) Because of the decentralized political scheme that both countries share and the need to articulate an adequate system of competencies in consequence; (2) Because of the international experience that Spanish companies have at the sector’s technological forefront, they are very competitive; (3) Due to the adequate functioning of the Spanish legal and organizational framework since, despite its shortcomings, as we later will comment, it has managed to develop successful financing formulas and management models that, in general terms, have allowed to ensure with reasonable efficiency, continuity, stability and sustainability in the provision of urban water services.

Download Full-text