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The “social choice” of privatising urban water services: a case study of Madrid in Spain

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  • Alberto Ruiz-Villaverde

    () (Universidad de Granada.)

  • Andrés J. Picazo-Tadeo

    (Universidad de Valencia)

  • Francisco González-Gómez

    (Universidad de Granada.)

Abstract

In countries where privatisation is permitted by law, policymakers usually give different reasons of general interest to allow private companies to manage water services. However, these kinds of decisions often provoke intense political debate and are at times opposed by citizens. In this paper, we illustrate how Analytic Hierarchy Process (AHP) techniques can be used to analyse the rationality of complex decisions regarding the management of water services. As a case study, we analyse the recent decision taken by the Regional Government of Madrid (Spain) to part-privatise the management of water services by introducing a private partner. In doing so, we use information from a questionnaire completed by a panel of five experts in water management, including both scholars and professionals. The results raise doubts about the rationality of the decision to privatise water services in Madrid. Rather than social interest, other reasons may be behind the decision, such as satisfying private interests whilst continuing to take advantage of maintaining public institution status.

Suggested Citation

  • Alberto Ruiz-Villaverde & Andrés J. Picazo-Tadeo & Francisco González-Gómez, 2013. "The “social choice” of privatising urban water services: a case study of Madrid in Spain," Working Papers 1322, Department of Applied Economics II, Universidad de Valencia.
  • Handle: RePEc:eec:wpaper:1322
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    References listed on IDEAS

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    1. repec:eee:jpolmo:v:39:y:2017:i:2:p:333-348 is not listed on IDEAS
    2. Boardman, Anthony E. & Vining, Aidan R. & Weimer, David L., 2016. "The long-run effects of privatization on productivity: Evidence from Canada," Journal of Policy Modeling, Elsevier, vol. 38(6), pages 1001-1017.
    3. Ruiz-Villaverde, Alberto & González-Gómez, Francisco & J. Picazo- Tadeo, Andrés, 2015. "The privatisation of urban water services: theory and empirical evidence in the case of Spain," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 31, pages 157-174.
    4. repec:spr:waterr:v:31:y:2017:i:8:d:10.1007_s11269-016-1355-1 is not listed on IDEAS

    More about this item

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out

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