The objective of this paper is to understand the impact of regulation and competition policy upon low-income households. A further objective is to consider how regulatory and competition policies might help to reduce the scale and level of poverty. In order to narrow down the study to a manageable size, it has been decided to focus on a single sector: water. The water supply sector has a number of particular features: competition and regulatory issues are currently being reconsidered in the context of growing private sector participation, changes in competition and regulatory frameworks have been relatively well documented, large-scale providers co-exist with small-scale water vendors offering a potentially competitive environment, and finally the literature on sustainable livelihoods is beginning to consider water-related issues. The general focus of the discussion is on water supply in urban areas. The paper is divided into a number of sections. Section II considers the significance of water for the poor. The analysis draws on the sustainable livelihood framework to understand the different ways in which the availability of water affects household well-being. Section III then identifies and summarises three \"models\" of water supply: large-scale formal networks, generally smaller-scale, sometimes informal, water providers and community-managed systems. Section IV to VI consider affordability, access and quality respectively. Section VII looks particularly at issues related to employment and income-generation related to the water sector. Regulatory and competition policy directly and indirectly influence the situation of low-income households. Four emerging research themes are identified: Understanding the consequences of private sector involvement; The informal/formal sector interface; How might access and affordability best be achieved for the poorest families? A number of subsidy regimes are proposed; and competition, regulation and political power.
Manchester, UK, CRC Working Paper, No. 37, 63 pp.