Water Nationalization: network access, quality, and health outcomes
AbstractIn the case of natural monopolies there tends to be a trade-off between a higher quality of output provided by private firms, and a better access for poor consumers provided by public firms. This is partly the reflection of differences in objectives by private and public firms. The former tend to be profit-driven, whereas the latter tend to base decisions on political agendas (Chong and Lopez de Silanes, 2005). The objective of this paper is to explore the impact on network access, water quality, and health outcomes of Uruguay’s nationalization of water services. An important advantage of focusing on nationalization rather than privatization is that it avoids selection bias due to cherry-picking by firms or governments at the time of privatization. Indeed, nationalization in Uruguay affected all private firms, as water was declared “part of the public domain”. Results suggest that the change in ownership led to an increase in the sanitation rate, as well as improvements in water quality. It was also accompanied by a decline in water-related child mortality, although this latter effect tends not to be statistically significant across most specifications.
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Bibliographic InfoPaper provided by Département des Sciences Économiques, Université de Genève in its series Research Papers by the Department of Economics, University of Geneva with number 11051.
Length: 46 pages
Date of creation: May 2011
Date of revision:
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nationalization; access to sanitation; water quality; child mortality.;
Other versions of this item:
- Borraz, Fernando & González, Nicolás & Olarreaga, Marcelo, 2011. "Water Nationalization: network access, water quality, and health outcomes," CEPR Discussion Papers 8415, C.E.P.R. Discussion Papers.
- Fernando Borraz & Nicolás Gonzalez Pampillón & Marcelo Olarreaga, 2011. "Water nationalization: network access, quality, and health outcomes," Documentos de Trabajo (working papers) 1811, Department of Economics - dECON.
- D60 - Microeconomics - - Welfare Economics - - - General
- F10 - International Economics - - Trade - - - General
- H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
- I10 - Health, Education, and Welfare - - Health - - - General
- L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
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