Modernization and urban water governance. Organizational change and sustainability in Europe (Bolognesi, 2018)

Claude Menard

HD Bolognesi, T. 2018. Modernization and urban water governance. Organizational change and sustainability in Europe. London: Palgrave-Macmillan. ISBN 978-1-137-59255-2, 446 p., €117,69.

(URL: www.palgrave.com/gp/book/9781137592545 )

Claude Menard

Centre d’Economie de la Sorbonne, Paris; claude.menard@univ-paris1.fr

To cite this Review: Menard, C. 2020. Review of "Modernization and urban water governance. Organizational change and sustainability in Europe", Palgrave-Macmillan, 2018, by Thomas Bolognesi, http://www.water-alternatives.org/index.php/boh/item/140-bolognesi

 

This book is about the impact the so-called 'modernization' of urban water regulation in Europe in the 1990s (at the time EU-15) had on the organization of the sector and its sustainability. It assesses this impact mainly, although not exclusively, through three country case studies presented as three ideal-types: France, Germany, and England and Wales. It does so through a conceptual framework that combines insights from New Institutional Economics (NIE) and Institutional Resources Regimes (IRR). It concludes to the failure of the changes promoted by the EU. The book attributes this failure to problems of coordination that Europe did not grasp properly because of flaws in the way it dealt with collective action and heterogeneous systems. Indeed, the book carries the main lesson that "not only does modernization fail to satisfy its own requirements in terms of sustainability, it stirs up antagonism between the economic pillar and the other pillars" (307; italics in the original).

As stated upfront (p. 4), this 'modernization' targeted: (1) a rationalization of public procurement; (2) an increasing reliance on market mechanisms; and (3) an improved sustainability of urban water systems. The author shows that these changes took their inspiration in then fashionable 'new public management' and the theory of contestable markets. His critical approach takes its inspiration from New Institutional Economics (NIE) and the less conceptualized literature on Institutional Resources Regimes (IRR). The former framework structures the investigation of the ideal-types, characterized at the micro-level through the Williamsonian lens of transaction cost economics and at the macro-level through the Northian lens of institutional analysis. The later body of literature, less known from this reviewer, seems to be a combination of the polycentric analysis of Ostrom and a revised version of the property rights literature in relation to common goods. The methodology resolutely adopts a comparative approach. 

The book is structured in two parts, three if one considers the long chapter 6 (the last one before the conclusion) on 'Institutional Dynamics and Sustainability' as a part in itself. Part I mainly digs into the empirical characterization of the three ideal-types, the author moving from observations ('facts') to their interpretation as 'salient facts', with a view of identifying factors favoring or hampering the 'modernization' agenda. Part II draws theoretical lessons from these stylized facts, with an emphasis on those elements that, notwithstanding the well-intentioned target of de-politicizing urban water systems, ended up in a failure.  

Throughout the extensive arguments and data developed over 400 pages, the author mobilizes a wide variety of authors, concepts, and methodologies to deliver a multidimensional analysis of urban water systems. To keep this review tractable, I shall boil down my discussion to three aspects: (1) the characterization of the three ideal-types; (2) the gap between the micro-analytics of the water systems and the macro-institutional dimension of their regulations; and (3) problems raised by the various methodologies used to deal with these issues.

The characterization of the ideal-types, at the core of Part I (although Part II also provides insights on their differences), is posited in relation to the European policies of the 1990s. These policies targeted the 'modernization' of urban water systems through 'liberalization'. They intended to introduce competition in a network infrastructure that imposes severe constraints for market-oriented regulations (pp. 37 and sq.), making improbable a successful implementation of recipes adopted for other networks (e.g., telecoms or energy). Indeed, the 'one size-fits-all' reform favored by the EU faced the challenge of polycentric urban water systems, with major variations in their organization across countries and even across cities of the same country. Part I intend to capture these differences through a great many variables, too many in my view.  We end up with 62 'salient facts' (summarized in Box 3.1, p. 175 sq.), some descriptive, others normative, ultimately boiled down to three stylized facts (pp. 179 sq.). In that respect, chapter 4 of Part 2, building on the Williamsonian theory of organizations, is better structured and more reader-friendly. Indeed, the multiplicity and heterogeneity of indicators mobilized in Part I blur the central message, which is that the well-intentioned 'modernization' targeting the 'depoliticization' of the sector bumped into the variety of organizational arrangements among and between the ideal-types and failed to reach the goal of securing sustainability.

A second issue raised by this book concerns the modalities of interactions between the micro-level of specific water systems and the macro-level of institutions and regulation defined at the European level. The theme is recurrent and well-illustrated by figures 2.1 and 2.2, pointing the dualism between the institutional environment and the urban water cycle. More pragmatically, what mechanisms and devices bridge the gap between the European regulation and the behavior of local or regional operators? Bolognesi sometimes refers to a 'meso-level' between the macro- and the micro-level (e.g., pp.169 sq.). Unfortunately, he does not push the idea further. He apparently fills the gap through the concept of governance. However, chapter 4 refers to this notion in the Williamsonian perspective of 'mechanisms of governance' (markets, hybrids, hierarchies), which is perfectly relevant to analyze the modalities through which water is provided but says nothing about how these organizational arrangements interact with the rules defined in Brussels! This is too bad since the author often expresses his awareness of intermediate institutions (e.g., public bureaus, regulatory agencies, local authorities) as a crucial element for understanding why the 'modernization' agenda did not fulfill expectations. The benign ignorance of this institutional layer by European policy-makers likely led them to neglect the polymorphic nature of water systems, making reforms doomed to fail. In that respect, the author’s future research could benefit from recent contributions (e.g., Ostrom, 2014; Ménard, 2017) focusing on these 'meso-institutions' as 'go-between', linking the general rules of the game and firms and users.

Last, this extensive book also faces methodological challenges; some which the author had no control on, others stemming from his theoretical choices. The first difficulty, which Bolognesi share with all researchers involved in comparative analyses, comes from flaws in data availability. Notwithstanding progress in European integration, the information available is often far from appropriate. Data on urban water systems remains incomplete and heterogeneous, making a comparative approach particularly challenging, and the author faced this difficulty in his efforts to characterize the three ideal-types. Even major factors, such as investments or the role and evolution of PPPs, remain under-informed and often hardly comparable. The second difficulty differs in that it stems from Bolognesi’s research strategy. In his ambition to capture the complexity of urban water systems and the impact of their reform, he combines different concepts and frameworks, coming from NIE and IRR but also from other sources (e.g., Husserl). The underlying and often diverging assumptions and hypotheses lead to explanations not always compatible. For example, the discussion (chapter 6) about why 'modernization' did not provide expected results regarding sustainability relies on two explanations, one focusing on the urban water cycle, the other on institutional changes, with no clear link between them. 

Many other aspects of this innovative approach would deserve discussion. Citations are not always exact and sometime don’t make sense (e.g., p. 270); notation is not always consistent (p. 329 and sq. IRR becomes RIR!). The central message tends to be blurred by the abundance of details and side remarks and a style (and vocabulary) that often makes reading arduous. Nevertheless, this book provides a refreshing view on a challenging and complex problem: how can a unified regulation be relevant to a polycentric type of network?   

References

Ménard, C. (2017). Meso-institutions: The variety of Regulatory Arrangements in the Water Sector. Utilities Policy, 49: 6-19.

Ostrom, E. (2014). Do institutions for collective action evolve? Journal of Bioeconomics. 16 (1): 3-30

 

Additional Info

  • Author(s): Thomas Bolognesi
  • Year of publication: 2018
  • Publisher: Palgrave-MacMillan
  • Subject: Water policy, Water governance, Urban water supply, Water law, Privatisation
  • Type: Review
  • Review author: Claude Menard
  • Language: English
  • Authors: Thomas Bolognesi
  • Reviewer: Claude Menard