Does private management lead to improvement of water services? Lessons learned from the experiences of Bolivia and Puerto Rico

Access to clean water and wastewater services has been gaining importance as a global issue as we have become increasingly aware of the widespread and growing failures to meet this human need, which many argue is a basic human right. These failures have significant, adverse human health consequences including thousands of preventable deaths each day.

Water service privatization has been promoted by international donor organizations such as the World Bank and the International Monetary Fund as one way to address current water issues, particularly in developing nations. They have argued that private entities can improve water management because they can: (1) obtain access to capital needed to improve infrastructure; (2) improve system performance; (3) reduce water rates; and (4) be more responsive to consumer needs. As a result, in the 1980s, water privatization partnerships emerged in various parts of the world, including Latin America. Many of these partnerships have since been rescinded. The reasons given for abandoning privatization include: large increases in water rates, changes in economic conditions, deterioration of water quality, and failure to provide services to less-profitable areas. Currently, water privatization remains one of the most controversial issues in water policy circles.

As the main goal of my dissertation, I plan to research the similarities and differences in outcomes of water privatization projects in two Latin American countries, Bolivia and Puerto Rico. These two countries have differing histories, demographics, types of governments, economies, and geographies. They both, however, have granted concessions to private European water companies to manage all or parts of their water services. While Bolivia has had quality, quantity, and access problems under privatization, Puerto Rico enjoys universal access to water but has suffered mostly from quality issues. The varied settings and experiences of the two countries and the different projects within each country provide opportunities to better understand the public - private debate and the complexities associated with water privatization. In particular, given my legal and policy background, my research will focus on the political and legal processes, and the outcomes of water privatization in each country in terms of improving water services. To do this, I will travel to each country to carry out an in-depth study of each successful or failed privatization venture, thereby obtaining closer insight into the intricacies of each water privatization project. This research will enable me to analyze issues related to accessibility, quality, and operational efficiency of water management. The results of this research have potential implications for the future of water policy, including the evaluation of factors affecting the viability of privatization of water operations as a means of better and more equitably managing water services in diverse settings.