"The Privatisation of Water Utilities in Italy and the associated debate"

Privatisation per se has always been a highly controversial issue, but it becomes even more so when envisaging private sector participation in the provision of water services and sanitation. Due to the fact that water services are seen as such a key public utility, proposals for private sector participation often provoke strong opposition. Water is considered a common beneficial good, to be shared among all members of the community. It has to be safeguarded against waste and inefficient use, to preserve this resource for future generations. Water has the characteristics of a natural monopoly which is affected by asymmetric information between regulators and regulated entities, more so in the form of moral hazard. Considering its particular nature, it cannot be governed simply through market rules, since private operators are naturally devoted to profit maximisation. Instead, it requires the public sector either to provide the utility directly or to regulate the private economic agent that provides water services for the common good.