Keywords: Water Service Regulation, Institutional Design
This paper focuses on the issue related to the regulatory governance and in particular deals with the better level of vertical and horizontal decentralization of regulatory functions in Italy. This choice can have an important impact on the effectiveness of regulatory system. Starting from a brief overview of water service's specificities and the reasons for the public presence in the water sector, this paper considers the main advantages and disadvantages both assigning responsibility for water service regulation to a national or regional/local level and establishing sector-specific authority of regulation. Our results show that in order to increase regulatory effectiveness in the Italian water services, it is essential to devise a multilevel regulatory framework, by giving more independence to local regulators and setting up an independence national authority.