One Authority, Many Tariffs. Contractual Lock-in and the Speed of Harmonisation in French Wastewater Services

Mehdi Guelmamen and Iannis Reuter

Working Papers of BETA from Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg

Abstract: Mandated consolidation of local utilities transfers tariff-setting authority to a larger jurisdiction, which is then expected to charge a single price. We show that it does not, and we identify what stands in the way. Using the universe of French wastewater services over 2008–2024, we follow 1,937 municipal services through the transfer of their competence to an intermunicipal body and measure how fast the receiving authority harmonises the tariffs it inherits. Convergence is real but slow: a service whose tariff exceeded the average of its new perimeter by one euro per cubic metre closes twenty-nine per cent of that gap on average and half of it after five years, with no plateau in sight. Consolidated authorities do not merge the services they take over: the number of separate tariff perimeters per authority is unchanged five years on. The binding constraint appears contractual rather than political: comparing each delegated service with itself, convergence runs at fifteen per cent while its concession is still in force and at thirty-eight per cent once it has expired. Harmonisation, when it comes, falls on the smallest members of the new perimeter, whose tariffs rise by up to a quarter. Creating a single tariff-setting authority does not create a single tariff, and the speed at which one emerges is governed by the maturities of contracts signed before the reform.

Keywords: Wastewater services; Water tariffs; Intermunicipal cooperation; Uniform pricing; Cross-subsidies; Concession contracts (search for similar items in EconPapers)
JEL-codes: H77 L51 L95 Q25 (search for similar items in EconPapers)
Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
http://beta.u-strasbg.fr/WP/2026/2026-28.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ulp:sbbeta:2026-28

Access Statistics for this paper

More papers in Working Papers of BETA from Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg Contact information at EDIRC.
Bibliographic data for series maintained by ( this e-mail address is bad, please contact ).