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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.

Suggested Citation

  • Colin Kirkpatrick & David Parker, 2005. "Domestic Regulation and the WTO: The Case of Water Services in Developing Countries," The World Economy, Wiley Blackwell, vol. 28(10), pages 1491-1508, October.
    • Handle: RePEc:bla:worlde:v:28:y:2005:i:10:p:1491-1508
    DOI: 10.1111/j.1467-9701.2005.00744.x
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    Cited by:

    1. 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).
    2. 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.
    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. Philippe Marin, 2009. "Public-Private Partnerships for Urban Water Utilities : A Review of Experiences in Developing Countries," World Bank Publications - Books, The World Bank Group, number 2703, December.
    5. Rehdanz, Katrin & Berrittella, Maria & S.J. Tol, Richard & Zhang, Jian, 2008. "The Impact of Trade Liberalization on Water Use: A Computable General Equilibrium Analysis," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 23, pages 631-655.
    6. Onda, Kyle S. & Tewari, Meenu, 2021. "Water systems in California: Ownership, geography, and affordability," Utilities Policy, Elsevier, vol. 72(C).

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