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Did private sector participation improve water services in Tumbes, Peru?

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  • Solis, Ben

Abstract

The Tumbes concession, active from September 2005 to November 2018, was the only private operator among Peru's 50 water utilities. Its termination offers an opportunity to assess the performance of the private operator relative to the predominant municipal utility model in the country. Using the synthetic control method, this paper finds that, compared to its counterfactual, access indicators stagnated and underperformed in Tumbes, while quality indicators (service continuity and metering rate) showed improvements. These heterogeneous outcomes are explained through an in-depth analysis of the contractual design—which combined features of a management contract, a concession, and an affermage—and the regulatory framework. The contract design failed to secure large-scale investments needed to expand coverage (either by the public or private sector). However, smaller investments and management improvement, enabled by development and private financing as well as regulatory action, contributed to measurable gains in quality indicators.

Suggested Citation

  • Solis, Ben, 2026. "Did private sector participation improve water services in Tumbes, Peru?," Utilities Policy, Elsevier, vol. 101(C).
    • Handle: RePEc:eee:juipol:v:101:y:2026:i:c:s0957178726000470
    DOI: 10.1016/j.jup.2026.102188
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    JEL classification:

    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities

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