Competition theory has been poorly applied in infrastructure sectors characterized by joined-up physical networks, such as water, sanitation and electricity. Crude tendering mechanisms have been used to promote competition, resulting in unstable contracts. Meanwhile, competition issues are hardly recognized, or are even suppressed in the non-networked (i.e. not yet connected) parts of these sectors. The difference between the networked and non-networked sectors within a given service is arguably as important as that between the different services, such as water and electricity.
Competition has been seen as being fostered by liberalizing trade and this has raised hopes and fears among protagonists and opponents, respectively. In this context, the impact of the World Trade Organization's General Agreement on Trade in Services (GATS) on environmental services has been slight and the main contribution to be made by competition policy could prove to be at the micro-level. In that regard, it may be more helpful to refer to de-monopolization rather than competition.