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Assessing the impact of Mali's water privatization across stakeholders

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  • Antonio Estache
  • Emili Grifell-Tatjé

Abstract

This paper offers a 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 an index number inspired by Bennet (1920). We find four main impacts. First, taxpayers are the main losers as subsidies are still needed. Second, users benefited through lower real water prices, although users in Bamako did better than the others and future users will be hurt by insufficient investment. Third, labor, intermediate suppliers and investors have also benefited. Fourth, efficiency-equity trade-offs are for real in the water business in Africa. Indeed, the distribution of the gains within factor categories has not been even, largely favoring foreign actors over domestic actors. This easily explains the unhappiness of the Malians. The regulatory decisions to correct it explains why the private operator lost its incentive to stay in the country.

Suggested Citation

  • Antonio Estache & Emili Grifell-Tatjé, 2010. "Assessing the impact of Mali's water privatization across stakeholders," Working Papers ECARES ECARES 2010-037, ULB -- Universite Libre de Bruxelles.
  • Handle: RePEc:eca:wpaper:2013/69297
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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

    privatzation; regulation; efficiency; equity; distributional effects;

    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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