Part 1 Three Stylized Facts on UWSEs Modernization: Depoliticization, Resilience and Sustainability

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1 Part 1 Three Stylized Facts on UWSEs Modernization: Depoliticization, Resilience and Sustainability This first section has a dual purpose. Firstly, it is responsible for polishing the empirical material available on the modernization of urban water systems in Europe (UWSE) in order to enable us to consider it from a theoretical viewpoint. Secondly, it provides an empirical analysis of the modernization of UWSEs, gathering and updating the partial knowledge available in literature relating to the theme, to offer a comprehensive interpretation of that modernization process. Essentially, it is about an empirical characterization of the impact of modernization (explanatory variable) on the organization, dynamic and sustainability of UWSEs (explained variables). To this end, the section is divided into four items for observation: facts, salient facts, stylized facts and phenomena. Facts are direct observations, whilst salient facts tend to be those that are remarkable and, a priori, useful for characterization. Stylized facts, however, reflect the phenomenon of modernization. They emerge as a result of a rise in generality and their construction is dependent upon ensuring the consistency of several salient facts. Thus, this section deals with the facts relating to the modernization of UWSEs, highlighting the salient facts. Next, these salient facts are raised to the level of qualitative variables in order to logically put together stylized facts that represent a formulation of phenomena pertaining to the modernization of UWSEs. The results of this first section are found in the formulation of stylized facts that reflect phenomena for the purposes

2 20 Part 1 Three Stylized Facts on UWSEs Modernization... of the organizational (coordination method) and sustainable (effective coordination) dimensions of the modernization of UWSEs. These stylized facts present the relationship between the explanatory variable and each of the explained variables in an empirical manner. Thus, they will then be subject to a theoretical explanation, the conclusions of which are intended to be general in character, regarding the determinants of institutional coordination and evolution. The construction of the results of the observation stems from a general methodology, the constituent parts of which should be defined. We propose a presentation of this methodology in two stages in order to distinguish areas of consistency of the analysis from its implementation; because they are subject to the strengths and weaknesses. With regard to consistency, a general approach is adopted relating to a formal-regional ontology 1 compatible with the identification of phenomena (Husserl 1952; Nef 2009). From this perspective, the analytical element of observation is an abstract object, a single ontology at the same time as a piece of space and time, a piece of a property. [ We perceive] obvious properties, qualities entangled with objects and intertwined with each other (Nef 2006: 197). Thinking about objects therefore comes down to their properties, and the use of ontological elements helps shape the definition of phenomena. 2 In this context, recourse to the principles of formal ontology on the one hand fixes the point of view and perception of the observer, and on the other, provides a basis for the construction of the research subject (modernization of UWSEs) (Lawson 2003). In order to minimize the risk of tautology and confusion of the observation with its effect, we will first construct the research subject in a generic and theoretical manner in the form of an urban water system (UWS). Then, a regional analysis of the UWS will be followed by an observation of UWSEs in general and their modernization. The identification of regularities, irregularities and so on feeds the following observation: it is about clarifying what can be called a thing or what could be ownership of something real, with its basic relationship to actual circumstances (Husserl 1952: 123). Finally, the pooling of these observation elements results in the formulation of phenomena relating to the modernization of UWSEs.

3 Part 1 Three Stylized Facts on UWSEs Modernization In practical terms, the implementation of these general methodological principles takes the form detailed below. Firstly, we define the notions of UWSs and modernization. These notions are then analysed in the case of the EU-15 Member States (EU-15), as well as within their organizational and sustainable dimensions. These two dimensions refer to the two main objectives of institutional economics. The first relates to the modernization of UWSEs in terms of structure, and the second in terms of performance (Williamson 2005; Brousseau et al. 2011). The analysis takes the form of storytelling, which describes the organization of the UWS under discussion. Strictly speaking, storytelling is a mode of communication that is based on narrative and the alignment of concepts unique to the author. This is integrated into a holistic approach, which comes closer to this first mode of the pattern model in the sense that: an event or action is explained by identifying its place in a schematic model that characterizes the process of change at work in the whole of the system (Wilber and Harrison 1978: 73). 3 This characterization then results in an interaction between the UWS and the specificities of UWSEs. In this way, the highlighting of salient facts punctuates this storytelling process as a way of improving the transparency of the construction phenomena (Wilber and Harrison 1978). Indeed, in the conclusion of this section, the salient facts become variables and are logically connected in such a way as to enunciate the stylized facts relating to the modernization of UWSEs. Following this statement, we can collate and recall all of the salient facts of the first part. This enables the reader to assess the strength of the wording of the phenomena and to verify the relevance of the analysis by comparing it to the list of seven verification points proposed by B. Ward (1972: 189): 1. Are the facts and theories properly presented? 2. Are important facts or theories omitted? 3. Is it possible to find different stories that use the same facts and theories as those of the proposed story? 4. Are the facts and theories relevant or essential to the story? 5. Do the experts of the various elements of the story believe the story itself? 6. Has the data been processed correctly? 7. Has all relevant data been included?

4 22 Part 1 Three Stylized Facts on UWSEs Modernization... There are three main advantages to this method, the first at a general level and the other two at the level of application. Firstly, the analysis is framed and methodically organized by means of ontological principles. Secondly, the use of intermediate salient facts creates transparency in developing the results of the observation, which highlights the coherence and relevance of the analysis. Thirdly, it is possible to make generalizations. These benefits justify the use of this methodology. Nevertheless, we are aware of various issues in employing this approach. The main two pertain to its relationship with reality. Firstly, at the general level, the ontological principles limit ex ante the field of observation and therefore prohibit the identification of a number of, nevertheless real, salient facts. Then, in terms of application, it would appear that the full richness of the contingency is neither exhausted nor addressed in such a way that it is possible to trace it back to generality. Part 1 is comprised of two chapters, both constructed in the same way. The observation proceeds by applying a method presented in the first section of each chapter. The first chapter addresses the organizational dimension and the dynamics of UWSEs. On the basis of the analytical categories already in place, the second chapter focuses on the dimension of the sustainability of UWSEs. Notes 1. Here, regional is specific to a defined domain; the terms contrasts with the notion of universal. 2. This note is crucial in terms of overall coherence, for in some cases ontology and phenomenology are radically opposed to each other (Nef 2009). In this sense, the approach that is adopted does not fundamentally contradict itself. 3. The notion of the pattern model is taken from A. Kaplan (1964). In this way, storytelling is not in opposition to a mathematically formalized demonstration, but turns out be a supplement containing the notional architecture into which the simulation fits. The research of B. Ward (1972), as discussed by A. Gruchy, R. Solow, S. Karsten and O. Morgenstern in the Journal of Economic Issues (1973) is the basis for this thought process. D. McCloskey (1990) revisited the connection and is the current reference on these issues.

5 Bibliography 23 Bibliography Brousseau, Eric, Pierre Garrouste, and Emmanuel Raynaud Institutional Changes: Alternative Theories and Consequences for Institutional Design. Journal of Economic Behavior & Organization 79: Gruchy, Allan, Robert Solow, Siegfried Karsten, and Oskar Morgenstein Four Reviews of Benjamin Ward: What s Wrong with Economics. Journal of Economic Issues 7 (4): Husserl, Edmund Idées directrices pour une phénoménologie pure et une philosophie phénoménologique, Livre 3 ème : La phénoménologie et les fondements de la science. Paris: PUF. Kaplan, Abraham The Conduct of Inquiry: Methodology for Behavorial Science. San Francisco: Chandler. Lawson, Tony Reorienting Economics. London: Routledge. McCloskey, Donald N Storytelling in Economics. In Narrative in Culture: The Uses of Storytelling in the Sciences, Philosophy and Literature, ed. Cristopher Nash, London: Routledge. Nef, Frédéric Les propriétés des choses: expérience et logique. Paris: Vrin Traité d ontologie pour les non-philosophes (et les philosophes). Paris: Editions Gallimard. Ward, Benjamin N What s Wrong with Economics? New York: Basic Books. Wilber, Charles K., and Robert S. Harrison The Methodological Basis of Institutional Economics: Pattern Model, Storytelling, and Holism. Journal of Economic Issues 12 (1): Williamson, Oliver E The Economics of Governance. American Economic Review 95 (2): 1 18.