IDEAS home Printed from https://ideas.repec.org/a/eee/jpolmo/v37y2015i4p616-629.html
   My bibliography  Save this article

The ‘social choice’ of privatising urban water services: A case study of Madrid in Spain

Author

Listed:
  • Ruiz-Villaverde, Alberto
  • Picazo-Tadeo, Andrés J.
  • González-Gómez, Francisco

Abstract

In countries where privatisation is permitted by law, policymakers usually provide different reasons of general interest to allow private companies to manage water services. However, these decisions often provoke intense political debate and are at times opposed by citizens. We illustrate how the Analytic Hierarchy Process can be used to introduce a political analysis regarding the management of water services. We analyse the recent decision taken by the Regional Government of Madrid (Spain) to part-privatise the management of water services. Our main result suggests that policymakers should reconsider the importance of citizen participation in the management of water services.

Suggested Citation

  • Ruiz-Villaverde, Alberto & Picazo-Tadeo, Andrés J. & González-Gómez, Francisco, 2015. "The ‘social choice’ of privatising urban water services: A case study of Madrid in Spain," Journal of Policy Modeling, Elsevier, vol. 37(4), pages 616-629.
    • Handle: RePEc:eee:jpolmo:v:37:y:2015:i:4:p:616-629
    DOI: 10.1016/j.jpolmod.2015.04.005
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0161893815000575
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jpolmod.2015.04.005?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Carvalho, Pedro & Marques, Rui Cunha & Berg, Sanford, 2012. "A meta-regression analysis of benchmarking studies on water utilities market structure," Utilities Policy, Elsevier, vol. 21(C), pages 40-49.
    2. Patrick Bolton & Mathias Dewatripont, 2005. "Contract Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262025760, April.
    3. da Cruz, Nuno F. & Marques, Rui Cunha, 2012. "Mixed companies and local governance: no man can serve two masters," LSE Research Online Documents on Economics 59778, London School of Economics and Political Science, LSE Library.
    4. Alberto Ruiz-Villaverde & Francisco González-Gómez & Andrés J. Picazo-Tadeo, 2013. "Public choice of urban water service management: a multi-criteria approach," International Journal of Water Resources Development, Taylor & Francis Journals, vol. 29(3), pages 385-399, September.
    5. Germà Bel & Xavier Fageda, 2009. "Factors explaining local privatization: a meta-regression analysis," Public Choice, Springer, vol. 139(1), pages 105-119, April.
    6. Eckel, Catherine C & Vining, Aidan R, 1985. "Elements of a Theory of Mixed Enterprise," Scottish Journal of Political Economy, Scottish Economic Society, vol. 32(1), pages 82-94, February.
    7. Bel Germà & Fageda Xavier & E. Mildred, 2014. "Is private production of public services cheaper than public production? A meta-regression analysis of solid waste and water services," Public administration issues, Higher School of Economics, issue 3, pages 103-140.
    8. Tauchmann, Harald & Clausen, Hartmut & Oelmann, Mark, 2009. "Do organizational forms matter? Innovation and liberalization in the German wastewater sector," Journal of Policy Modeling, Elsevier, vol. 31(6), pages 863-876, November.
    9. Gomez-Limon, J.A. & Atance, I., 2004. "Identification of public objectives related to agricultural sector support," Journal of Policy Modeling, Elsevier, vol. 26(8-9), pages 1045-1071, December.
    10. Angel de la Fuente, 2012. "¿Qué reformas necesita el sistema de financiación regional?," UFAE and IAE Working Papers 900.12, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    11. García-Valiñas, María de los Ángeles & González-Gómez, Francisco & Picazo-Tadeo, Andrés J., 2013. "Is the price of water for residential use related to provider ownership? Empirical evidence from Spain," Utilities Policy, Elsevier, vol. 24(C), pages 59-69.
    12. Francisco González Gómez & Miguel Angel García Rubio, 2008. "Efficiency in the management of urban water services. What have we learned after four decades of research?," Hacienda Pública Española / Review of Public Economics, IEF, vol. 185(2), pages 39-67, July.
    13. Oliver Hart & Andrei Shleifer & Robert W. Vishny, 1997. "The Proper Scope of Government: Theory and an Application to Prisons," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(4), pages 1127-1161.
    14. Patrick W. Schmitz, 2001. "Partial Privatization and Incomplete Contracts: The Proper Scope of Government Reconsidered," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 57(4), pages 394-411, August.
    15. Boardman, Anthony E & Vining, Aidan R, 1989. "Ownership and Performance in Competitive Environments: A Comparison of the Performance of Private, Mixed, and State-Owned Enterprises," Journal of Law and Economics, University of Chicago Press, vol. 32(1), pages 1-33, April.
    16. P M McGuirk, 2001. "Situating Communicative Planning Theory: Context, Power, and Knowledge," Environment and Planning A, , vol. 33(2), pages 195-217, February.
    17. Gregory Pierce, 2012. "The Political Economy of Water Service Privatization in Mexico City, 1994–2011," International Journal of Water Resources Development, Taylor & Francis Journals, vol. 28(4), pages 675-691.
    18. Andrés J. Picazo-Tadeo & Francisco González-Gómez & Francisco J. Sáez-Fernández, 2006. "Accounting for operating environments in measuring water utilities’ managerial efficiency," The Service Industries Journal, Taylor & Francis Journals, vol. 29(6), pages 761-773, July.
    19. Christer Carlsson & Pirkko Walden, 1995. "AHP in Political Group Decisions: A Study in the Art of Possibilities," Interfaces, INFORMS, vol. 25(4), pages 14-29, August.
    20. Ortega de Miguel, Enrique & Sanz Mulas, Andres, 2007. "A public sector multinational company: The case of Canal de Isabel II," Utilities Policy, Elsevier, vol. 15(2), pages 143-150, June.
    21. Martin, Wade E. & Shields, Deborah J. & Tolwinski, Boleslaw & Kent, Brian, 1996. "An application of social choice theory to U.S.D.A. forest service decision making," Journal of Policy Modeling, Elsevier, vol. 18(6), pages 603-621, December.
    22. Andres Picazo-Tadeo & Francisco Saez-Fernandez & Francisco Gonzalez-Gomez, 2009. "The role of environmental factors in water utilities' technical efficiency. Empirical evidence from Spanish companies," Applied Economics, Taylor & Francis Journals, vol. 41(5), pages 615-628.
    23. Abbott, Malcolm & Cohen, Bruce, 2009. "Productivity and efficiency in the water industry," Utilities Policy, Elsevier, vol. 17(3-4), pages 233-244, September.
    24. Yoram Wind & Thomas L. Saaty, 1980. "Marketing Applications of the Analytic Hierarchy Process," Management Science, INFORMS, vol. 26(7), pages 641-658, July.
    25. Alessandro MARRA, 2007. "Internal Regulation By Mixed Enterprises: The Case Of The Italian Water Sector," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 78(2), pages 245-275, June.
    26. Brunner, Norbert & Lele, Ashwini & Starkl, Markus & Grassini, Laura, 2010. "Water sector reform policy of India: Experiences from case studies in Maharashtra," Journal of Policy Modeling, Elsevier, vol. 32(4), pages 544-561, July.
    27. José A. Gómez-Limón & Ignacio Atance, 2004. "Identification of Public Objectives Related to Agricultural Sector Support," Economic Working Papers at Centro de Estudios Andaluces E2004/57, Centro de Estudios Andaluces.
    28. Andrés Picazo-Tadeo & Francisco González-Gómez & Jorge Wanden-Berghe & Alberto Ruiz-Villaverde, 2012. "Do ideological and political motives really matter in the public choice of local services management? Evidence from urban water services in Spain," Public Choice, Springer, vol. 151(1), pages 215-228, April.
    29. Lai, Vincent S. & Wong, Bo K. & Cheung, Waiman, 2002. "Group decision making in a multiple criteria environment: A case using the AHP in software selection," European Journal of Operational Research, Elsevier, vol. 137(1), pages 134-144, February.
    30. Forman, Ernest & Peniwati, Kirti, 1998. "Aggregating individual judgments and priorities with the analytic hierarchy process," European Journal of Operational Research, Elsevier, vol. 108(1), pages 165-169, July.
    31. Stefan Hajkowicz & Kerry Collins, 2007. "A Review of Multiple Criteria Analysis for Water Resource Planning and Management," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 21(9), pages 1553-1566, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Alonso, José M. & Clifton, Judith & Díaz-Fuentes, Daniel, 2017. "The impact of government outsourcing on public spending: Evidence from European Union countries," Journal of Policy Modeling, Elsevier, vol. 39(2), pages 333-348.
    2. 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.
    3. Alberto Ruiz-Villaverde & Miguel A. García-Rubio, 2017. "Public Participation in European Water Management: from Theory to Practice," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 31(8), pages 2479-2495, June.
    4. 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.
    5. M. Isabel Sanchez-Hernandez & Juan José Maldonado-Briegas & Ramón Sanguino & Ascensión Barroso & M. Cristina Barriuso, 2021. "Users’ Perceptions of Local Public Water and Waste Services: A Case Study for Sustainable Development," Energies, MDPI, vol. 14(11), pages 1-17, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. Peeter Peda & Giuseppe Grossi & Margo Liik, 2013. "Do ownership and size affect the performance of water utilities? Evidence from Estonian municipalities," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 17(2), pages 237-259, May.
    3. O. Flores Baquero & J. Gallego-Ayala & R. Giné-Garriga & A. Jiménez-Fernández. Palencia & A. Pérez-Foguet, 2017. "The Influence of the Human Rights to Water and Sanitation Normative Content in Measuring the Level of Service," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 133(2), pages 763-786, September.
    4. Mande Buafua, Patrick, 2015. "Efficiency of urban water supply in Sub-Saharan Africa: Do organization and regulation matter?," Utilities Policy, Elsevier, vol. 37(C), pages 13-22.
    5. Daniel, Albalate & Germà, Bel & Albert, Gragera, 2019. "Politics, risk, and white elephants in infrastructure PPPs," Utilities Policy, Elsevier, vol. 58(C), pages 158-165.
    6. da Cruz, Nuno F. & Marques, Rui Cunha, 2013. "Mixed companies as local utilities," LSE Research Online Documents on Economics 59761, London School of Economics and Political Science, LSE Library.
    7. Francisco González-Gómez & Miguel García‐Rubio & Francisco Alcalá-Olid & M. Ortega-Díaz, 2013. "Outsourcing and Efficiency in the Management of Rural Water Services," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 27(3), pages 731-747, February.
    8. García-Valiñas, Maria A. & Gonzales, Francisco & Suarez, Javier & Zaporozhets, Vera, 2015. "Private Sector Involvement in Water Services: Theoretical Foundations and Empirical Evidence," TSE Working Papers 15-590, Toulouse School of Economics (TSE).
    9. González-Gómez, Francisco & García-Rubio, Miguel A. & González-Martínez, Jesús, 2014. "Beyond the public–private controversy in urban water management in Spain," Utilities Policy, Elsevier, vol. 31(C), pages 1-9.
    10. Marta Suárez-Varela & María los Ángeles García-Valiñas & Francisco González-Gómez & Andrés J Picazo-Tadeo, 2017. "Ownership and Performance in Water Services Revisited: Does Private Management Really Outperform Public?," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 31(8), pages 2355-2373, June.
    11. da Cruz, Nuno F. & Marques, Rui Cunha, 2012. "Mixed companies and local governance: no man can serve two masters," LSE Research Online Documents on Economics 59778, London School of Economics and Political Science, LSE Library.
    12. N.F. Cruz & R.C. Marques & A. Marra & C. Pozzi, 2014. "Local Mixed Companies: The Theory And Practice In An International Perspective," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 85(1), pages 1-9, March.
    13. García-Valiñas, María de los Ángeles & González-Gómez, Francisco & Picazo-Tadeo, Andrés J., 2013. "Is the price of water for residential use related to provider ownership? Empirical evidence from Spain," Utilities Policy, Elsevier, vol. 24(C), pages 59-69.
    14. Fabio Monteduro, 2014. "Public–private versus public ownership and economic performance: evidence from Italian local utilities," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 18(1), pages 29-49, February.
    15. Romano, Giulia & Guerrini, Andrea, 2014. "The effects of ownership, board size and board composition on the performance of Italian water utilities," Utilities Policy, Elsevier, vol. 31(C), pages 18-28.
    16. Aidan R. VINING & Anthony E. BOARDMAN & Mark A. MOORE, 2014. "The Theory And Evidence Pertaining To Local Government Mixed Enterprises," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 85(1), pages 53-86, March.
    17. Mühlenkamp, Holger, 2013. "From state to market revisited: more empirical evidence on the efficiency of public (and privately-owned) enterprises," MPRA Paper 47570, University Library of Munich, Germany.
    18. Friese, Maria & Heimeshoff, Ulrich & Klein, Gordon J., 2020. "Property rights and transaction costs – The role of ownership and organization in German public service provision," International Journal of Industrial Organization, Elsevier, vol. 72(C).
    19. Holger MAHLENKAMP, 2015. "From State To Market Revisited: A Reassessment Of The Empirical Evidence On The Efficiency Of Public (And Privately-Owned) Enterprises," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 86(4), pages 535-557, December.
    20. Paolo Esposito & Spiridione Lucio Dicorato & Emanuele Doronzo, 2021. "The effect of ownership on sustainable development and environmental policy in urban waste management: An explicatory empirical analysis of Italian municipal corporations," Business Strategy and the Environment, Wiley Blackwell, vol. 30(2), pages 1067-1079, February.

    More about this item

    Keywords

    Urban water services; Privatisation; Decision-making; Analytic Hierarchy Process (AHP); C6; H83; L33;
    All these keywords.

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jpolmo:v:37:y:2015:i:4:p:616-629. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/505735 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.