The regulatory reforms in Italian local public services: an overview and some lessons for the future

Magda Bianco () and Paolo Sestito ()
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Magda Bianco: Banca d'Italia
Paolo Sestito: Banca d'Italia

No 18, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

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.

Keywords: local public services; liberalization; regulation (search for similar items in EconPapers)
JEL-codes: H23 H42 H75 K23 L33 L43 (search for similar items in EconPapers)
Date: 2008-09
New Economics Papers: this item is included in nep-eec and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:opques:qef_18_08

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