The Regulatory Reforms in Italian Local Public Services: An Overview and Some Lessons for the Future

26 Pages Posted: 14 Feb 2009

Date Written: September 22, 2008

Abstract

The paper summarizes the framework used in a research project on local public services carried out by Bank of Italy researchers. It discusses motivations, characteristics, results and general lessons of the project, whose sector-specific results are detailed in individual papers. The project was set up to analyze the effectiveness and outcomes of a set of reforms initiated approximately 15 years ago (but still unfinished in many respects). Studies of specific economically important and socially sensitive sectors were performed, to obtain an updated picture of the current framework (ownership structure, role of local authorities) and evaluate performance (market structure, costs and quality, profitability, environmental results). A set of horizontal studies (on the evolution of regulation, the spread of project financing, the growth of some large players) complemented the sectoral analyses. As a whole the project confirmed that the results of the reforms have been unsatisfactory. The paper also discusses some characteristics of the regulatory framework and market structures that could explain the reforms' poor results: a) insufficient attention to sectoral peculiarities in the regulatory design; b) the approach used in determining tariffs that should have covered full costs; c) excessively fragmented regulatory authorities, which were set up at too local a level; d) insufficient separation between the different roles played by local authorities as regulators, majority shareholders of service providers and representatives of consumers' interests.

Note: Downloadable document is in Italian.

Keywords: local public services, liberalization, regulation

JEL Classification: H23, H42, H75, K23, L33, L43

Suggested Citation

Bianco, Magda and Sestito, Paolo, The Regulatory Reforms in Italian Local Public Services: An Overview and Some Lessons for the Future (September 22, 2008). Bank of Italy Occasional Paper No. 18. Available at SSRN: https://ssrn.com/abstract=1342438 or http://dx.doi.org/10.2139/ssrn.1342438

Magda Bianco (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Paolo Sestito

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

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