Regulating water services for all in developing economies

Economic regulation is being introduced into the water services sector in developing economies, where widespread poverty and service inadequacies affect regulatory rationales. This paper analyses the regulatory experience in 11 metropolitan areas with respect to the challenge of reaching all urban consumers, particularly the poor.
Evidence suggests that pro-poor regulatory outcomes have been constrained by inadequate framework conditions and a limited understanding of alternative providers. In many cases regulatory governance has been equally vulnerable, although some regulators have demonstrated a capacity and willingness to achieve a balance between the social and financial objectives of water service regulation.
Regulators need to be supported in: identifying more clearly the needs of the under-served, developing an understanding of a range of differentiated service delivery mechanisms moving towards cost-reflective tariffs for conventional customers in order to facilitate creative services to the poor, and in developing leadership.