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European Journal of Law and Economics

, Volume 33, Issue 1, pp 23–45 | Cite as

Emergence of an innovative regulation mode in water utilities in France: between commission regulation and franchise bidding

  • Lætitia Guérin-SchneiderEmail author
  • Michel Nakhla
Article

Abstract

Academic debate on public utility regulation has considerably evolved over the past 50 years. The conflict between the supporters of franchise regulation and commission regulation has given way to much more balanced in-depth analyses. Regulation is defined on the basis of its structure but also its scope and regulation incentives. A regulation mode must above all be evaluated with regard to the institutional environment. We propose a neo-institutionally-inspired analysis framework and show how the dynamic relationship between regulation and the institutional environment can lead to reforms and ultimately to more efficient regulation. The findings of a French water utility sector analysis underline how a series of national normative reforms and local exploratory reforms can give rise to innovations in the regulation mode. This new hybrid regulation, between commission regulation and franchise bidding, could be more effective than previous regulation mode, i.e. more stable and in line with stakeholders’ expectations.

Keywords

Regulation Public utilities Water utilities Law and economics of regulated industries Reform design Institutions 

JEL classification

K23 B20 L43 L95 D02 E61 

Notes

Acknowledgments

The authors acknowledge the three reviewers for their constructive remarks.

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Copyright information

© Springer Science+Business Media, LLC 2010

Authors and Affiliations

  1. 1.Cemagref, UMR G-EAUMontpellierFrance
  2. 2.Mines Paris Tech, CGSParisFrance

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