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Assessing the impact of Mali’s water privatization across stakeholders

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  • Estache, Antonio
  • Grifell-Tatjé, Emili

Abstract

This paper offers a unique quantitative evaluation of the distribution of the welfare of a water privatization experience in Mali among labor, investors, intermediate input providers, users and taxpayers. The assessment is based on indicator duality and production theory. The paper shows that users benefited through lower real water prices -although users in Bamako did better than the rest and future users will be hurt by insufficient investment. The firm’s workers, its intermediate suppliers and investors have also clearly benefited during the short privatization duration. However the paper also shows that taxpayers are the main losers as subsidies are still needed. There are also serious efficiency-equity trade-offs, with an uneven gain distribution within factor categories and foreign actors clearly favored over domestic actors. This easily explains the unhappiness of the Malians. The regulatory decision to correct it explains why the private operator lost its incentive to stay in the country.

Suggested Citation

  • Estache, Antonio & Grifell-Tatjé, Emili, 2011. "Assessing the impact of Mali’s water privatization across stakeholders," CEPR Discussion Papers 8717, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:8717
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    References listed on IDEAS

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    1. Garrigosa, E Genescá & Tatjé, E Grifell, 1992. "Profits and total factor productivity: A comparative analysis," Omega, Elsevier, vol. 20(5-6), pages 553-568.
    2. Kristof Witte & David Saal, 2010. "Is a little sunshine all we need? On the impact of sunshine regulation on profits, productivity and prices in the Dutch drinking water sector," Journal of Regulatory Economics, Springer, vol. 37(3), pages 219-242, June.
    3. Colin Kirkpatrick & David Parker & Yin-Fang Zhang, 2006. "An Empirical Analysis of State and Private-Sector Provision of Water Services in Africa," World Bank Economic Review, World Bank Group, vol. 20(1), pages 143-163.
    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. Denis Lawrence & Anya Richards, 2004. "Distributing the Gains from Waterfront Productivity Improvements," The Economic Record, The Economic Society of Australia, vol. 80(s1), pages 43-52, September.
    6. Sahoo, Biresh K. & Tone, Kaoru, 2009. "Radial and non-radial decompositions of profit change: With an application to Indian banking," European Journal of Operational Research, Elsevier, vol. 196(3), pages 1130-1146, August.
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    Cited by:

    1. Hudon, Marek & Périlleux, Anaïs, 2014. "Surplus distribution and characteristics of social enterprises: Evidence from microfinance," The Quarterly Review of Economics and Finance, Elsevier, vol. 54(2), pages 147-157.

    More about this item

    Keywords

    distributional effect; efficiency; equity; privatization; regulation;

    JEL classification:

    • C60 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - General
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises

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