Water

Regulatory Design and Reform

In over 40 years of service to the utility industries, NERA has made many important contributions to both the theory and the practice of regulatory economics.

Policy makers are increasingly using economic analysis in their assessment of options for the institutional structure and scope of regulation. Economic analysis is especially well-suited to the task of designing and reforming regulatory institutions and methods because it is grounded in the principles of welfare maximization through market design. NERA experts, who are well versed in the most up-to-date and relevant research in these areas, use economics to help analyze issues, provide insights and formulate practical, innovative solutions to a wide range of problems.

NERA has a strong track record of working with policy makers, international agencies, regulators and water undertakers throughout the world to establish appropriate frameworks for economic regulation and policy in the water and sanitation sectors. We have addressed a wide range of practical regulatory issues in many different countries, including:

• The vertical and horizontal allocation of regulatory responsibilities;
• The design of contractual arrangements;
• The improvement of incentive mechanisms for management;
• The safeguarding of affordable access to utility services; and
• The economic issues surrounding tariff setting and disputes.