Is Successful Water Privatization a Pipe Dream?: An Analysis of Three Global Case Studies

Abstract

Facing water scarcity and shortages, governments in developing nations have turned to water privatization. ' Once implemented, however, water privatization programs have overwhelmingly been met with public hostility and "anti-privatization protests and riots." In some water privatizations, the privatizers themselves have become bankrupt or have failed to meet investment and expansion targets. Similarly, while most privatizations are supposed to deliver Pareto improvements-results "that make one party to a deal better off without making another party worse off' - water privatizations have largely delivered the opposite. Water privatizations have caused cholera outbreaks among consumers, insurmountable costs for both consumers and privatizers, and additional transaction costs for governments. Despite such outcomes, the World Bank still supports water privatization, sometimes only lending to countries if they privatize their water systems.