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Stay Public or Go Private?: A Comparative Analysis of Water Services between Quito and Guayaquil

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  • Paul Carrillo
  • Orazio Bellettini
  • Elizabeth Coombs

Abstract

This paper computes several indicators of water coverage, quality, and prices in Ecuador’s two largest cities: Quito and Guayaquil—both before and after the privatization of water services in Guayaquil. The type of data sources that are used make it possible to specifically control for income and, thus, to evaluate changes in water provision, particularly among the poor. These indicators provide useful information about how certain water-related services have changed over time and facilitate evaluating the performance of each company. It should be emphasized, however, that such estimates cannot be used to identify the causal effects of the privatization of water provision. In particular, differences in a) before-concession water-coverage trends, c) rural-to-urban migration patterns, and c) other idiosyncratic institutional characteristics between these two cities, suggest that Quito may not be a suitable control group for identifying the casual effects of privatization.

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Bibliographic Info

Paper provided by Inter-American Development Bank, Research Department in its series Research Department Publications with number 3236.

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Date of creation: Aug 2007
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Handle: RePEc:idb:wpaper:3236

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  1. Sebastian Galiani & Paul Gertler & Ernesto Schargrodsky, 2002. "Water for Life: The Impact of the Privatization of Water Services on Child Mortality," Working Papers 54, Universidad de San Andres, Departamento de Economia, revised Sep 2005.
  2. Andrei Shleifer, 1998. "State versus Private Ownership," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 133-150, Fall.
  3. Nicolas Barberis & Maxin Boycho & Andrei Shleifer & Natalia Tsukanova, 1995. "How Does Privatization Work? Evidence from the Russian Shops," Harvard Institute of Economic Research Working Papers 1721, Harvard - Institute of Economic Research.
  4. George R.G. Clarke & Katrina Kosec & Scott Wallsten, 2009. "Has private participation in water and sewerage improved coverage? Empirical evidence from Latin America," Journal of International Development, John Wiley & Sons, Ltd., vol. 21(3), pages 327-361.
  5. Rafael La Porta & Florencio Lopez-de-Silane, 1997. "The Benefits of Privatization: Evidence from Mexico," NBER Working Papers 6215, National Bureau of Economic Research, Inc.
  6. repec:reg:wpaper:370 is not listed on IDEAS
  7. Megginson, William L & Nash, Robert C & van Randenborgh, Matthias, 1994. " The Financial and Operating Performance of Newly Privatized Firms: An International Empirical Analysis," Journal of Finance, American Finance Association, vol. 49(2), pages 403-52, June.
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