Private sector participation in the water and sanitation sector: alternative options and measurement issues

Al-Hmoud, Rashid and Edwards, Jeffrey A. (2004): Private sector participation in the water and sanitation sector: alternative options and measurement issues. Published in: The International Water Demand Management Conference (30 May 2004)

Abstract

This paper studies various aspects of the increasing role of private investment in the water services and sanitation (WSS) sector in developing countries. We start by surveying the different types of private sector participation (PSP) in the WSS sector, and the share of public and private responsibilities under each scheme. We then proceed by empirically testing the impact of PSP in the provision of water and sanitation on the average individuals’ welfare with regard to water and sanitation. This paper shows that the private sector has the potential to generate a number of social and environmental benefits for a number of reasons, including its potential to increase efficiency within the sector and increase much-needed levels of investment. Poorer households gain access to affordable services from which they have long been excluded. Furthermore, adverse public health effects of inadequate service provision may be mitigated, and wastewater collection and treatment levels may be increased. The paper also illustrates actual case studies involving PSP in developing countries to present some of the actual improvements that the private sector has already generated, particularly the increased access to water and sanitation, and the rise in water use as suggested by our empirical part.

• Item Type: MPRA Paper
• Language: English
• Keywords: Water demand, public-private partnership, conservation
• Subjects: Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q2 - Renewable Resources and Conservation > Q25 - Water

References

Bhaskar, V., “Privatization and the Developing Countries: the Issues and the Evidence,” (UNCTAD/OSG/DP/47), Discussion Papers No.47, Geneva, United Nations Conference on Trade and Development, August 1992.

Briscoe, J., “Financing Water and Sanitation Services: The Old and New Challenges,” The World Congress of the International Water Supply Association, Durban, 1995.

Briscoe, J., “Incentives Key to Improving Water and Sanitation Services,” Water & Wastewater International, Vol. 8, Issue 2, April 1992.

Caves, Douglas, and Laurits Christensen, “Infrastructure Finance: Issues, Institutions, and Policies,” Policy Research Working Paper, No.1374, Washington D.C., The World Bank, November 1980.

Cook, Dennis R. and Sanford Weisburg, "Diagnostics for Heteroskedasticity in Regression," Biometrika, 70, Issue 1, 1983.

Diaz, L.F., “A New Strategy for Water in Mexico City,” paper presented at the Conference on Sanitation projects in Mexico, Center for Business Intelligence, 1997.

Finger, Mathiaws and Jeremy Allouche, “Water Privatization: Trans-National Corporations and the Re-regulation of the Water Industry”, Spon Press, 2002.

Galal, A., and M. Shirley, “Overview: Does Privatization Deliver? Highlights from a World Bank Conference,” EDI Development Studies, Economic Development Institute of the World Bank, Washington, D.C., 1994.

Hazin, L.S., “Private Sector Participation in Water Supply and Sanitation: Realizing Social and Environmental Objectives in Mexico D.F.,” in Private Firms and Public Water, edited by Johnston, N. and Wood, L., 2001.

Kessides, C., “Institutional Options for the Provision of Infrastructure”, World Bank Discussion Papers, No. 212, Washington, D.C., The World Bank, 1993.

Lawrence, P., J. Meigh, and C. Sullivan, "The Water Poverty Index: an International Comparison," Keele Economics Research Papers, Department of Economics, Keele University, Keele, Staffordshire, ST5 5BG, UK, March 2003.

Lyon, John D., and Chih-Ling Tsai, "A Comparison of Tests for Heteroskedasticity," Statistician, Vol. 45, Issue 3, 1996.

Mazzucchelli, S., P. Rodriguez, and M.G. Tossi, “Private Sector Participation in Water Supply and Sanitation: Realizing Social and Environmental Objectives in Buenos Aires,” in Private Firms and Public Water, edited by Johnston, N. and Wood, L., 2001.

McIntosh, A., and C. Ynigues, “Second Water Utilities Data Book, Asian and Pacific Region,” Manila, Asian Development Bank, 1997.

OECD, Urban Infrastructure: Finance and Management, Paris 1991.

Ramsey, J. B., "Tests for Specification Errors in Classical Linear Least-Squares Regression Analysis," Journal of the Royal Statistical Society, Series B, 31, No. 2, 1969.

Saade, L., “Toward more Efficient Urban Water Management in Mexico,” Water International, 22 (3); 1997, pp.153-58.

Saghir, J., E. Sherwood, and A. Macoun, “Management Contracts in Water and Sanitation—Gaza’s Experience.” Public Policy for the Private Sector, The World Bank Group, No. 177, April, 1998.

Saghir, J., M. Schiffler, and M. Woldu, “Urban Water and Sanitation in the Middle East and North Africa Region: The Way Forward”. Paper presented at the 8th Meeting of the World Bank’s MENA Council of Advisors; Amman, Jordan, 1999.

Saghir, J., and R. Taylor. 1999. "Private Sector Participation in Water Supply and Wastewater: Case Studies." Presentation by World Bank staff in Cairo, Egypt.

Shapiro, S. S., and M. B. Wilk, "An analysis of Variance Test for Normality," Biometrika, Vol. 52, No. 3/4, 1965.

Shapiro, S. S., M. B. Wilk, and Chen, "A Comparative Study of Various Tests for Normality," Journal of the American Statistical Association, Vol. 63, No. 324, 1968.

Silva, G., N. Tynan and Y. Yilmaz, "Private Participation in the Water and Sewerage Sector--Recent Trends" in Public Policy for the Private Sector, World Bank note No.147, Washington D.C.: The World Bank, 1998.

Vickers, J., and G. Yarrow, “Privatization: an Economic Analysis,” MIT Press Series on the Regulation of Economic Activity, No.18, 1988, Cambridge, Massachusetts.

Vuylsteke, C., “Techniques of Privatization of State-Owned Enterprises. Vol.1. Methods and Implementation,” World Bank Technical Paper, No.88, 1988, Washington, D.C.

Willig, Robert D., Public versus Regulated Private Enterprise, the World Bank’s Annual Conference on Development Economics, Washington D.C., May 1993.

The World Bank, World Development Report, Development and the Environment, Washington D.C., 1992.

The World Bank. "Private Participation in Infrastructure Database," http://rru.worldbank.org/PPI/index.asp