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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.

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Article provided by Elsevier in its journal World Development.

Volume (Year): 40 (2012)
Issue (Month): 12 ()
Pages: 2564-2577

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Handle: RePEc:eee:wdevel:v:40:y:2012:i:12:p:2564-2577
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  1. Kakwani, N., 1993. "Performance in living standards : An international comparison," Journal of Development Economics, Elsevier, vol. 41(2), pages 307-336, August.
  2. Clarke, George R. G. & Kosec, Katrina & Wallsten, Scott, 2004. "Has private participation in water and sewerage improved coverage? - empirical evidence from Latin America," Policy Research Working Paper Series 3445, The World Bank.
  3. Komives, Kristin, 1999. "Designing pro-poor water and sewer concessions : early lessons from Bolivia," Policy Research Working Paper Series 2243, The World Bank.
  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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