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Retornos a escala en agua y saneamiento: estimaciones para América Latina
[Returns to scale in water and sanitation: estimates for Latin Amercia]

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  • Ferro, Gustavo
  • Lentini, Emilio
  • Mercadier, Augusto
  • Romero, Carlos A.

Abstract

In the whole world there are strong discussions on how to yield a more equitable access and a more efficient provision. One issue linked to efficiency is the achievement of scale economies in the industry, and the optimal dimension of water and sanitation providers. Changes in the industrial structure of the sector, through mergers in highly atomized services, the splitting of very concentrated ones, or the property discussion (private versus public) had been hotly debated in different countries. Many times, the decisions had politicized because of the social complexity of the sector. In this study, we aim to estimate the presence of returns to scale, exploiting a database of water and sanitation providers in Latin America. Public policy consequences are direct: if those returns to scale do exist, and the sector is not taking advantage of them, the agglomeration of small providers can eventually save resources which are useful to solve the coverage shortages and the insufficient access for the poor in the region. The scale economies study adds a technical argument to the discussion, because the prescription could be, as it happens to suggest the study, of the convenience of agglomerating small providers to reduce unit costs.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 20324.

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Date of creation: Jan 2010
Date of revision: Jan 2010
Handle: RePEc:pra:mprapa:20324

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Keywords: returns to scale; economies of scale; water and sanitation;

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