Water Services in Italy: Implementation of the Reform and Efficiency of Providers

37 Pages Posted: 16 Feb 2009

Date Written: September 22, 2008

Abstract

The paper investigates the organization of the Italian water sector in the light of the reforms of public utilities. The aim is to examine the degree of implementation of the water sector reform (the so-called Galli Law of 1994) and assess the performance of operators through a study of their financial indicators and a non-parametric efficiency analysis. The information sources include two Bank of Italy surveys carried out in 2007 on local public water authorities and local water service providers. Financial indicators point to a low return on equity: for more than half of the firms it is lower than the risk-free interest rate. The non-parametric efficiency analysis does not reveal significant economies of scope and highlights a certain degree of variability of technical efficiency scores. This suggests that there is room for efficiency gains through the introduction of comparative competitive mechanisms such as the yardstick competition.

Note: Downloadable document is in Italian.

Keywords: water supply, data envelopment analysis, public utilities, natural monopoly, regulation

JEL Classification: K23, L95, Q25, C61, D24, H42, L51

Suggested Citation

Benvenuti, Michele and Moller, Luca, Water Services in Italy: Implementation of the Reform and Efficiency of Providers (September 22, 2008). Bank of Italy Occasional Paper No. 23, Available at SSRN: https://ssrn.com/abstract=1344229 or http://dx.doi.org/10.2139/ssrn.1344229

Michele Benvenuti

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Luca Moller (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
102
Abstract Views
863
rank
324,928
PlumX Metrics