Does Regulation by Contract Decreases Transparency? - Evidence from Jakarta's Water Services Sector

This paper evaluates the transparency aspect of regulation by contract as applied in Jakarta's water services sector. Transparency is categorized into active and passive disclosure. The former uses publication of contract, service level/customer service and investment planning as a proxy for transparency whereas the latter measure transparency using the applicability of freedom of information law. The result is that transparency is lacking in Jakarta where regulation by contract is employed. In Jakarta, contracts are not published, service level/customer service information not available to the public and investment planning process only negotiated bilaterally without any public involvement. In terms of passive disclosure rules, the Freedom of Information Law is also not applicable to regulatory body in Jakarta (JWSRB). The paper also apply similar framework to water services regulation in Bogor, Victoria and England. Unlike Jakarta, contracts are published in Victoria. In both Victoria, England and Bogor service level/customer service information is published as they are part of public document and investment planning process is open and transparent. The Freedom of Information Law is also applicable to regulatory bodies in Victoria (ESC) and England (OFWAT). The paper confirms various hypothesis that regulation by contract decreases transparency and elaborates strategies to mitigate such lack of transparency