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Domestic Regulation and the WTO: The Case of Water Services in Developing Countries

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  • Colin Kirkpatrick
  • David Parker

Abstract

Trade liberalisation of environmental services, and water services in particular, under the current WTO General Agreement on Trade in Services (GATS), has been widely advocated as a means of increasing private sector participation in the water sector in developing countries. Recognising that effective regulation is needed to ensure that the potential gains from private sector involvement are fully realised, the paper considers the relationship between national regulatory autonomy and GATS liberalisation in water services. The empirical evidence on the impact of private sector involvement in the provision of water services in developing countries is reviewed, and a number of reasons why water privatisation has been problematic in lower-income countries are identified, including transaction costs and regulatory weaknesses. The study concludes that developing countries with limited regulatory resources should adopt a cautious approach to services liberalisation, by sequencing market liberalisation measures to match the development of their regulatory institutional capacity. Copyright 2005 Blackwell Publishing Ltd..

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Bibliographic Info

Article provided by Wiley Blackwell in its journal World Economy.

Volume (Year): 28 (2005)
Issue (Month): 10 (October)
Pages: 1491-1508

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Handle: RePEc:bla:worlde:v:28:y:2005:i:10:p:1491-1508

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References

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  1. Schmitz, Patrick W., 2001. "The Hold-Up Problem and Incomplete Contracts: A Survey of Recent Topics in Contract Theory," MPRA Paper 12562, University Library of Munich, Germany.
  2. Levy, Brian & Spiller, Pablo T, 1994. "The Institutional Foundations of Regulatory Commitment: A Comparative Analysis of Telecommunications Regulation," Journal of Law, Economics and Organization, Oxford University Press, vol. 10(2), pages 201-46, October.
  3. Guasch, J. Luis & Hahn, Robert W., 1997. "The costs and benefits of regulation : implications for developing countries," Policy Research Working Paper Series 1773, The World Bank.
  4. Estache, Antonio & Gomez-Lobo, Andres & Leipziger, Danny, 2000. "Utility privatization and the needs of the poor in Latin America - Have we learned enough to get it right?," Policy Research Working Paper Series 2407, The World Bank.
  5. Alcazar, Lorena & Abdala, Manuel A. & Shirley, Mary M., 2000. "The Buenos Aires water concession," Policy Research Working Paper Series 2311, The World Bank.
  6. Roland, Gérard, 1994. "On the Speed and Sequencing of Privatization and Restructuring," CEPR Discussion Papers 942, C.E.P.R. Discussion Papers.
  7. Alfred E. Kahn, 1988. "The Economics of Regulation: Principles and Institutions," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262610523, December.
  8. Antonio Estache & MartÌn A. Rossi, 2002. "How Different Is the Efficiency of Public and Private Water Companies in Asia?," World Bank Economic Review, World Bank Group, vol. 16(1), pages 139-148, June.
  9. Antonio Estache & A. Gomez-Lobo & D. Leipziger, 2001. "Utilities Privatization and the Poor: Lessons and evidence from Latin America," ULB Institutional Repository 2013/43997, ULB -- Universite Libre de Bruxelles.
  10. Peltzman, Sam, 1976. "Toward a More General Theory of Regulation," Journal of Law and Economics, University of Chicago Press, vol. 19(2), pages 211-40, August.
  11. Kirkpatrick, Colin & George, Clive, 2004. "Trade and Development: Assessing the Impact of Trade Liberalisation on Sustainable Development," Impact Assessment Research Centre (IARC) Working Papers 30579, University of Manchester, Institute for Development Policy and Management (IDPM).
  12. Crew, Michael A & Kleindorfer, Paul R, 1996. "Incentive Regulation in the United Kingdom and the United States: Some Lessons," Journal of Regulatory Economics, Springer, vol. 9(3), pages 211-25, May.
  13. repec:reg:rpubli:120 is not listed on IDEAS
  14. Anwandter, Lars & Ozuna, Teofilo Jr., 2002. "Can public sector reforms improve the efficiency of public water utilities?," Environment and Development Economics, Cambridge University Press, vol. 7(04), pages 687-700, October.
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Cited by:
  1. Maria Berrittella & Katrin Rehdanz & Richard S.J. Tol & Jian Zhang, 2007. "The Impact Of Trade Liberalisation On Water Use: A Computable General Equilibrium Analysis," Working Papers FNU-142, Research unit Sustainability and Global Change, Hamburg University, revised Aug 2007.
  2. Philippe Marin, 2009. "Public-Private Partnerships for Urban Water Utilities : A Review of Experiences in Developing Countries," World Bank Publications, The World Bank, number 2703, October.
  3. Wang, Hongwei & Wu, Wenqing & Zheng, Shilin, 2011. "An econometric analysis of private sector participation in China’s urban water supply," Utilities Policy, Elsevier, vol. 19(3), pages 134-141.
  4. Hulya Dagdeviren & Simon A. Robertson, 2009. "Access to Water in the Slums of the Developing World," Working Papers 57, International Policy Centre for Inclusive Growth.
  5. Kirkpatrick, Colin & George, Clive & Scrieciu, Silviu Serban, 2005. "Enhancing the Contribution of Trade Liberalisation in Environmental Services to Sustainable Development," Impact Assessment Research Centre (IARC) Working Papers 30581, University of Manchester, Institute for Development Policy and Management (IDPM).

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