Social Policy, Regulation and Private Sector Involvement in Water Supply

UNRISD organized a final workshop to present the research findings of the project on Social Policy, Regulation and Private Sector Involvement in Water Supply in Geneva on 11-12 September 2006. The overall objective of the research was to investigate whether private sector involvement in water supply is the “right” option, even with regulatory mechanisms in place. In order to explore this, the research has addressed issues surrounding access, affordability, and how social policies and regulation are designed to achieve the specified objectives of the private sector involvement.

Privatization of public infrastructure has been a mantra of many development agencies since the late 1980s. Private sector participation was introduced in developing countries mainly on competition and efficiency arguments. Private sector participation, it was claimed, would bring in much-needed investment, increase access and improve the quality of water supply. Indeed, historically, most water systems in Western European countries were initiated by the private sector. Today, however, water and sanitation in most of the countries are provided through public systems: it is estimated that over 90 per cent of the world’s population is currently supplied by the public sector, generally funded generally through taxation, borrowing and user fees.

Seven case studies were initially identified in the first phase of the research, which included in-depth examination of the debates surrounding private sector involvement within the specific political, cultural and economic settings of each country. The seven case studies are: Brazil; Burkina Faso; Colombia; England, Wales and Scotland; France; Hungary; and Malaysia. All the country studies use extensive statistics on access, affordability and regulation, and employ statistical and econometric modelling to investigate the impact of private sector participation on the poor. The preliminary research findings have revealed thought-provoking general trends that warrant close examination. These findings will likely have major policy implications for governments and international agencies.

The project researchers presented their findings during the workshop. Participants included academics, researchers, policy makers, NGOs, the private sector and others.