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

  • 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)

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.

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Paper provided by Centre for Development Economics, Delhi School of Economics in its series Working papers with number 205.

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Length: 24 pages
Date of creation: Oct 2011
Date of revision:
Handle: RePEc:cde:cdewps:205
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  1. 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.
  2. 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 672-78, November.
  3. 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.
  4. Estache, Antonio & Kouassi, Eugene, 2002. "Sector organization, governance, and the inefficiency of African water utilities," Policy Research Working Paper Series 2890, The World Bank.
  5. repec:cup:cbooks:9780521271943 is not listed on IDEAS
  6. 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.
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