Esther Gerlach, August 2007 - PhD Thesis Abstract

Economic regulation is being introduced into the water services sector in developing economies, where the service inadequacies experienced by large numbers of low-income consumers stand in marked contrast with calls for universal access to water services. Based on indications that regulation can be made responsive to the needs of vulnerable groups, this thesis explores its potential for facilitating the early delivery of an appropriate level of service to low-income households in the pursuit of sustainable universal access.

Regulatory experience in selected metropolitan areas is analysed with respect to the challenge of reaching all urban consumers, including the underserved urban poor living in slums and informal settlements, who frequently rely on informal and largely unregulated water markets operating alongside failing utility providers. Results from in-depth empirical case study research in Jakarta, Indonesia, Nairobi, Kenya, and Amman, Jordan, are combined with findings from the interlinked ‘Regulating Public and Private Partnerships for the Poor’ project (DFID KaR 8320) to ensure a broad overview of regulatory challenges, constraints and successful responses.

The case study evidence suggests that pro-poor regulatory outcomes are constrained by inadequate institutional frameworks. In the absence of clear regulatory mandates, realistic sector targets and well-designed regulatory instruments, the research has highlighted the importance of good regulatory governance and reflexivity to guide pro-poor sector development. Through proactive engagement with consumers and their present providers regulators may facilitate a process of reflexive modernisation without compromising their role as ‘impartial referees’ to maintain the financial balance upon which service extension into marginalised areas and long-term sustainability of services ultimately depend. Transparently evolving service obligations are part of the proposed dynamic universal service concept, which in line with the co-evolution of social, economic and technological developments allows regulation to adapt progressively to changing demand for services within the bounds of technical feasibility and available finance.