Is a Little Sunshine All We Need? On the Impact of Sunshine Regulation on pro\u85ts, productivity and prices in the Dutch drinking water sector.

Preliminary version This paper analyzes the conduct of publicly owned monopolistic utilities regulated by a voluntary sunshine regulatory model (i.e. publication of the performances of utilities). In particular, we examine the behaviour of Dutch drinking water utilities before and af-ter the introduction of the sunshine regulation. As during the period 1992-2006 several alternative regulatory reforms including privatization, yardstick competition and pro\u85t regulation were also seriously considered, we examine how the discussion and possible implementation of these reforms inuenced the behaviour of the utilities. By decom-posing pro\u85t change into its economic drivers (quantity e¤ect, price e¤ect, operating e ¢ ciency, technical progress, scale, etc.), our results suggest that in an appropriate po-litical and institutional context, sunshine regulation can be an e¤ective and appropriat