THE ECONOMICPLAYBOOK 1. INCENTIVES AND MOTIVES
Updated: Oct 1
In the autumn of 1989, the government of Astonia launched what it called the most democratic economic reform in the country's history. Full page advertisements appeared in the national newspapers. Television commercials showed ordinary people — a teacher, a retired couple, a young man in a factory — holding share certificates and smiling. The message was simple: the water that had always belonged to everyone was now available for everyone to own.
The concept was that public ownership was inefficient, and private providers would invest in the decaying infrastructure and see improvements in all aspects of water management. The incentives to work hard were simply not there in the public sector, but transferring management to the private sector would create something magical the public sector could never deliver.
This concept had not been applied to a regional natural monopoly, where the regulator would replace the competitor. It was unclear if incentives that worked between competing industries, would still apply to an essential utility service whose customers could not simply take their business elsewhere.
The Theory of Efficiency
The new regulators could determine how much Manor Farm could charge its customers and they could scrutinise the investment required to maintain and improve the service. Separate bodies would oversee drinking-water quality and environmental protection. The theory was elegant. Private capital would provide investment. Commercial incentives would improve efficiency. Regulation would protect customers from monopoly power.
For the moment, the pieces fitted together. The share price was set deliberately low. The offer was oversubscribed within days. Manor Farm Utilities was no longer a public utility. It was a company with shareholders, a board, and a legal obligation to return value to its investors who were for now the public.
The government's argument was straightforward, and it was well made. Ministers argued that the utility companies had presided over years of underinvestment and inefficiency, while protecting existing management and workforce structures too often took precedence over serving customers. Private ownership would introduce the discipline of the market. Companies that performed would grow. Companies that failed would face consequences. Everyone, ultimately, would benefit.
The Vision of Edward Doyce
Indeed, Edward Doyce had come into Manor Farm Water five years earlier. An engineer by background. He had seen how endless layers of bureaucracy could slow or stall improvement and development. He wanted to revitalise the company and drew upon modern commercially successful companies to radically shake up Manor Farm Utilities. He cut a swathe through middle management. Sold off many properties owned by the company that had no economic benefit.
He changed the atmosphere in the management office, stopping boozy lunches, and redeveloping office spaces. Whilst he kept his own office, he removed the executive dining room, managers were expected to visit operational sites, layers of committees disappeared, while local teams were given greater responsibility for decisions and improvements.
The changes were disliked by some, who left the firm, but applauded by others. The government of Astonia noticed the changes and asked Edward to lead on a new economic plan to privatise the utility companies. Years of sluggish development and an absence of incentives had led to utility companies to preside over increasingly failing infrastructure. Astonia that had previously been a powerhouse, leading the world in production and design, was now lagging on almost all metrics of economic performance. The country was desperate for a new vision.
MANOR FARM UTILITIES MANTRAS
Water belongs to everyone.
Customers should share in our success.
Investment improves services.
Efficiency protects affordability.
Resilience protects the future.
Regulation protects the public.
Manor Farm Utilities purpose remained the provision of an essential public service. But it was now expected to achieve that purpose as a successful commercial company. At the time, those objectives did not appear incompatible. The regulator created to oversee Manor Farm Utilities was staffed largely by people who shared the government's vision. Its powers were defined narrowly. It could intervene on pricing. It had limited authority over investment decisions. It could not easily compel a private company to spend money it had chosen not to spend. This was not an oversight. It was a design choice.
The Golden Era
The first annual report of Manor Farm Utilities celebrated record efficiency savings. Engineers had enthusiastically embraced the new management structure, and this had led to shorter lead times replacing leaking Victorian pipes and replacing ageing sewage treatment plants. Access to capital markets had allowed Manor Farm Utilities to invest for the future. The future for water stewardship had never looked better with the regulator and the company working together to preserve the natural environment.
The share price rose. Salmon returned to rivers, with anglers celebrating the joys of catching these beautiful fish. Edward was awarded by the king of Astonia for his work improving the environment, as the king was a keen fly fisherman. Edward Doyce was also awarded bonuses through shares in the company as part of his accolade for the improvements he engineered.
By the time Edward Doyce retired in 2000, Manor Farm Utilities looked very different from the organisation he had inherited. Investment had increased. Ageing infrastructure was being replaced. Water quality had improved and Manor Farm Utilities were known for excelling in environmental water stewardship. The share price had risen. Doyce himself had prospered too. Part of his reward had been paid in shares, aligning his interests with those of the company he had helped transform.
The Legacy
At his retirement dinner, politicians, business leaders and celebrities gathered to celebrate his achievements. Doyce surprised the audience by announcing that he intended to leave corporate life altogether. He had bought a small farm in the north of Astonia and planned, he said, to spend rather more time fishing in the rivers he had spent the previous fifteen years trying to clean.
His photograph was hung in the entrance to Manor Farm Utilities headquarters. Beneath it was a small brass plaque: Edward Doyce, Chief Executive 1984–2000. Put the customer first. He left behind a profitable company, improving infrastructure, cleaner rivers and a management team confident that the principles he had introduced would survive him. There seemed little reason to think otherwise.
Other countries were now studying Astonia's model. Private ownership appeared to have released investment, improved efficiency and delivered environmental improvements that years of public ownership had struggled to achieve. In 2000, there seemed little reason to question any of the founding principles.
The playbook appeared to be working.
THE ECONOMIC PLAYBOOK • AUGUST 2026 • ASTONIA
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