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Does Greater Autonomy Improve Performance? Evidence From Water Service Providers In Indian Cities

Author

Listed:
  • Shreekant Gupta

    (Department of Economics, Delhi School of Economics, Delhi, India)

  • Surender Kumar

    (Department of Business Economics, University of Delhi)

  • Gopal K. Sarangi

    (TERI University, New Delhi)

Abstract

We assess the efficiency of urban water supply in 27 Indian cities using data envelopment analysis (DEA). We also group cities by the management structure of their water utilities. Utilities with greater degree of functional autonomy perform better, supporting the hypothesis that more autonomy in management leads to better performance among water utilites. Our results also have implications for urban domestic water pricing--most of the utilities operate under decreasing returns to scale (DRS) implying water should be priced at marginal cost of supply.

Suggested Citation

  • Shreekant Gupta & Surender Kumar & Gopal K. Sarangi, 2011. "Does Greater Autonomy Improve Performance? Evidence From Water Service Providers In Indian Cities," Working papers 205, Centre for Development Economics, Delhi School of Economics.
  • Handle: RePEc:cde:cdewps:205
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    References listed on IDEAS

    as
    1. Feigenbaum, Susan & Teeples, Ronald, 1983. "Public versus Private Water Delivery: A Hedonic Cost Approach," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 672-678, November.
    2. Sharkey,William W., 1983. "The Theory of Natural Monopoly," Cambridge Books, Cambridge University Press, number 9780521271943, December.
    3. Grosskopf, S, 1986. "The Role of the Reference Technology in Measuring Productive Efficiency," Economic Journal, Royal Economic Society, vol. 96(382), pages 499-513, June.
    4. Kumar, Surender, 2004. "Decomposition of total factor productivity growth: A regional analysis of Indian industrial manufacturing growth," Working Papers 04/22, National Institute of Public Finance and Policy.
    5. Crain, W Mark & Zardkoohi, Asghar, 1978. "A Test of the Property-Rights Theory of the Firm: Water Utilities in the United States," Journal of Law and Economics, University of Chicago Press, vol. 21(2), pages 395-408, October.
    6. Estache, Antonio & Kouassi, Eugene, 2002. "Sector organization, governance, and the inefficiency of African water utilities," Policy Research Working Paper Series 2890, The World Bank.
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    More about this item

    JEL classification:

    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities
    • L38 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Policy
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General

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