Using the "budget-based scheme" approach developed by Kirby et.al. (1991) and Reichelstein (1992), this paper establishes the optimal policy function in order to control "hidden actions" from managers of Public Water Utilities (PWU) regarding investments that deviate from the Optimized Business...

Affordability of water services is a pressing water policy issue for both the developed and in particular the developing world. Despite its well-known theoretical shortcomings affordability analysis for water supply is up to now widely based on the ratio of a household's water expenditure and...