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Privatization and Renationalization: What Went Wrong in Bolivia’s Water Sector?


  • Hailu, Degol
  • Osorio, Rafael Guerreiro
  • Tsukada, Raquel


This paper investigates the impact of water service privatization in Bolivia. It compares the performance of cities in which the service was privatized (La Paz and El Alto) with a city in which it is managed as a cooperative (Santa Cruz de la Sierra) and one where the service is publicly provided (Cochabamba). We find that access to water by low-income consumers increased under private provision. However, the concessionaire failed to meet the targets stipulated in the contract. The tariff increases required for full cost recovery eventually led to public outrage that forced the government to renationalize the company.

Suggested Citation

  • Hailu, Degol & Osorio, Rafael Guerreiro & Tsukada, Raquel, 2012. "Privatization and Renationalization: What Went Wrong in Bolivia’s Water Sector?," World Development, Elsevier, vol. 40(12), pages 2564-2577.
  • Handle: RePEc:eee:wdevel:v:40:y:2012:i:12:p:2564-2577
    DOI: 10.1016/j.worlddev.2012.05.032

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    References listed on IDEAS

    1. Kakwani, N., 1993. "Performance in living standards : An international comparison," Journal of Development Economics, Elsevier, vol. 41(2), pages 307-336, August.
    2. Komives, Kristin, 1999. "Designing pro-poor water and sewer concessions : early lessons from Bolivia," Policy Research Working Paper Series 2243, The World Bank.
    3. 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.
    4. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
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    Cited by:

    1. Post, Alison E. & Murillo, María Victoria, 2016. "How Investor Portfolios Shape Regulatory Outcomes: Privatized Infrastructure After Crises," World Development, Elsevier, vol. 77(C), pages 328-345.
    2. repec:hal:journl:dumas-00811476 is not listed on IDEAS
    3. Ouda, Omar K.M. & Al-Waked, Rafat F. & Alshehri, Abdulrahman A., 2014. "Privatization of water-supply services in Saudi Arabia: A unique experience," Utilities Policy, Elsevier, vol. 31(C), pages 107-113.
    4. repec:hal:journl:hal-01023795 is not listed on IDEAS
    5. Wutich, Amber & Beresford, Melissa & Carvajal, Cinthia, 2016. "Can Informal Water Vendors Deliver on the Promise of A Human Right to Water? Results From Cochabamba, Bolivia," World Development, Elsevier, vol. 79(C), pages 14-24.
    6. Estrin, Saul & Pelletier, Adeline, 2016. "Privatisation in Developing Countries: What Are the Lessons of Recent Experience?," IZA Discussion Papers 10297, Institute for the Study of Labor (IZA).
    7. Swann Bommier & Cécile Renouard, 2014. "On Equity in India's Water Supply Public-Private Partnerships," Working Papers hal-01023795, HAL.
    8. Bommier, Swann & Renouard, Cécile, 2014. "On Equity in India's Water Supply Public-Private Partnerships," ESSEC Working Papers WP1411, ESSEC Research Center, ESSEC Business School.

    More about this item


    privatization; water; poverty; MDGs; Bolivia; Latin America;


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