Gaming in a benchmarking environment. A non-parametric analysis of benchmarking in the water sector

MPRA Paper from University Library of Munich, Germany

Abstract: This paper discusses the use of benchmarking in general and its application to the drinking water sector. It systematizes the various classifications on performance measurement, discusses some of the pitfalls of benchmark studies and provides some examples of benchmarking in the water sector. After presenting in detail the institutional framework of the water sector of the Belgian region of Flanders (without benchmarking experiences), Wallonia (recently started a public benchmark) and the Netherlands (introduced already in 1997 a public benchmark), we non-parametrically measure the productivity gains by the use of a dynamic Malmquist index. The three regions, each at a different stage of the benchmarking circle, exhibit different performance trends. The ‘carrot’ and the ‘stick’ of benchmarking seem to offer an effective incentive to trigger performance. In addition, the Malmquist decompositions provide some evidence on the ‘gaming’ of the stakeholders by the water utilities.

Keywords: Benchmarking; gaming; Malmquist decomposition; regulation; water sector (search for similar items in EconPapers)
JEL-codes: C14 L95 (search for similar items in EconPapers)
Date: 2009-04-12
New Economics Papers: this item is included in nep-eff and nep-reg
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Citations: View citations in EconPapers (3)

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