• Richard

Regulating, Montpellier and the Executive Masters programme

In Montpellier, discussing regulation with the Executive Masters course of the impressive AgroParisTech OpT programme (they get to go on a field trip to Singapore PUB and Phnom Penh PPWSA later in the year!).

Along with the teaching I was trying out part of my understanding of regulatory capacity mimicking country institutional capacity which seems to go hand in hand with economic development (particularly if you take the HDR indicators). So it is really ‘frustrating’ when a hypothesis is proven false.

Following on from my research for DFID, and the subsequent book on Regulating etc I have been leading a module on economic regulation for the different groups of OpT students over a number of years. Both in the earlier research and subsequent groups of students and discussions with them, there appeared to be a reasonable correlation between country wealth, as measured by GDP per capita, and country institutional capacity, and the governance capacity to undertake some level of economic regulation, not necessarily requiring an economic regulator of course.

So, I had developed the small diagram, shown above, to illustrate this and with a suggested spectrum of regulation (starting with benchmarking) to match.

With the excellent group of students this year I didn't share the diagram directly but we developed for each of the twelve countries represented their GDP per person at Purchasing Power Parity level, their Country Governance Index scores and their present average water tariff in USD using standard exchange rates (perhaps should have used PPP rates for that also?). And can you guess what we found this year?

The two lowest-income countries had the most sophisticated, including most pro-poor benchmarking aspects, of the twelve. Hypothesis falsified. Harrumph … And 'proof' that their regulatory approach has been working is that they had the same average tariff as the other 4 countries with a similarly 'high' tariff of $0.5/m3.

But a 'bonus' from time spent in Montpellier came from seeing this cover in the pavement to a services chamber, blazoned with the label 'free'!! I like to think it was a useful illustration to my oft used 'TAANSTAAFL' in lectures: 'There Ain't No Such Thing As A Free Lunch' !!

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