Regulation performance of public–private partnerships in the Portuguese water sector

Abstract

Starting from transaction costs (and new institutional economic approaches, this study sought to understand the influence of the regulatory structure and incentives on the performance of publicprivate partnerships in Portugal. The findings of this case study show that agency participation in the mediation process between parties is time consuming and improper from a technical perspective; in addition, the agency is captured by political interests, which does not favor users' interests or the sustainability of water services. Thus, the regulatory structure and incentives cannot be dependent on political nominations, and existing contractual rules need to be reassigned.