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Privatisation and Renationalisation: What Went Wrong in Bolivia?s Water Sector?

Author

Listed:
  • Degol Hailu

    () (UNDP SURF)

  • Rafael Guerreiro Osorio

    () (International Poverty Centre)

  • Raquel Tsukada

    () (International Policy Centre for Inclusive Growth)

Abstract

This paper investigates the concentration of access to safe water across income levels in Bolivia. In particular, it focuses on how privatisation has changed coverage, affordability and the concentration of access to water on the part of the poor. We compare the performance of cities in which the service was privatised (La Paz and El Alto) with a city in which it is managed as a cooperative (Santa Cruz de la Sierra) and one where the service is publicly provided (Cochabamba). We examine the pre- and post-privatisation periods. Close inspection of the household surveys reveals that access to water by low-income consumers increased in the periods when the service was provided under private concessions. Coverage has expanded significantly in the bottom quintiles of the population in the cities where water was privatised, and thus access to water is more equitable. The state, however, renationalised the water utility. What went wrong, then, in Bolivia?s water sector? The answer is that the private concessionaire failed to meet the targets stipulated in the concession contract. The tariff increases required for full cost recovery eventually led to public outrage that forced the government to terminate the contract. (...)

Suggested Citation

  • Degol Hailu & Rafael Guerreiro Osorio & Raquel Tsukada, 2009. "Privatisation and Renationalisation: What Went Wrong in Bolivia?s Water Sector?," Working Papers 58, International Policy Centre for Inclusive Growth.
  • Handle: RePEc:ipc:wpaper:58
    as

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    File URL: http://www.ipc-undp.org/pub/IPCWorkingPaper58.pdf
    File Function: First version, 2009
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    References listed on IDEAS

    as
    1. Gover Barja & Miguel Urquiola, 2003. "Capitalization, regulation and the poor: access to basic services in Bolivia," Chapters,in: Utility Privatization and Regulation, chapter 9 Edward Elgar Publishing.
    2. Hulya Dagdeviren & Simon A. Robertson, 2009. "Access to Water in the Slums of the Developing World," Working Papers 57, International Policy Centre for Inclusive Growth.
    3. Hulya Dagdeviren & Degol Hailu, 2008. "Tariff Hikes with Low Investment: The Story of the Urban Water Sector in Zambia," One Pager 57, International Policy Centre for Inclusive Growth.
    4. Kakwani, N., 1993. "Performance in living standards : An international comparison," Journal of Development Economics, Elsevier, vol. 41(2), pages 307-336, August.
    5. Antonio Estache, 2007. "Infrastructure and Development: A survey of Recent and Upcoming Issues," ULB Institutional Repository 2013/44060, ULB -- Universite Libre de Bruxelles.
    6. Whittington, Dale, 1992. "Possible Adverse Effects of Increasing Block Water Tariffs in Developing Countries," Economic Development and Cultural Change, University of Chicago Press, vol. 41(1), pages 75-87, October.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. James Alm, 2015. "Financing Urban Infrastructure: Knowns, Unknowns, And A Way Forward," Journal of Economic Surveys, Wiley Blackwell, vol. 29(2), pages 230-262, April.

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