Today, decentralised sewage disposal plants are increasingly accepted as permanent solution in rural areas. However, it is still debated in which cases they are more appropriate than central systems. The following paper deals with technological and institutional aspects of this problem. It poses the questions, which problems will arise if decentralised systems gain ground, which solutions may be necessary and how do these solutions affect the costs of decentralised systems? Although decentralised systems can keep up with central systems regarding costs for investment and operation as well as treatment efficiency, they still fail to meet quality standards in everyday life. To achieve a better compliance, technological as well as institutional approaches seem to be necessary. First, technologies of treatment plants, process control and maintenance should be optimized. Second, governmental controlling institutions must be adjusted. On the one hand, this is due to the increasing number of autonomous stakeholders involved. On the other hand, this is caused by the public good character of waste water treatment once it exceeds the basic needs of households. Thus, easy riding of households occurs. Better controlling institutions may not only minimise easy riding but also foster technological progress. Together, technological progress as well as new controlling institutions will influence private and social costs of decentralised systems and thus their range of use.