Amedeo Amato

This article attempts to review some issues about market failures and non-market failures in the local public utilities. Considering the different regulatory regimes no one seems superior to the others. The limitation of the rate of return and price cap regulatory schemes are well known. Conditions under which franchising permits to reach first best solutions are very restrictive. Yardstick competition may obtain satisfactory results, if it is used with other regimes, and if the different situations in which enterprises work are taken into account.