Strategic Considerations for Improving Water Sector Performance

In a series of articles on "best practices" of independent regulatory commissions (IRCs), Sanford Berg and Lynne Holt have noted the ways regulatory processes and policies either promote or deter investments in water and sanitation utility systems. In this article, the authors describe the constellation of factors affecting infrastructure investments and water utility operations. IRCs exercise most direct control over two factors: governance (agency design and processes) and regulatory policies (or incentives). Other factors are generally outside the regulatory domain but may influence or be influenced by regulatory governance and policies. Ultimately, the legitimacy and credibility of the regulatory system depends on how closely water sector performance matches realistic national objectives.