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Privatization and Renationalization: What Went Wrong in Bolivia’s Water Sector?

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  • Hailu, Degol
  • Osorio, Rafael Guerreiro
  • Tsukada, Raquel

Abstract

This paper investigates the impact of water service privatization in Bolivia. It compares the performance of cities in which the service was privatized (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 find that access to water by low-income consumers increased under private provision. However, the concessionaire failed to meet the targets stipulated in the contract. The tariff increases required for full cost recovery eventually led to public outrage that forced the government to renationalize the company.

Suggested Citation

  • Hailu, Degol & Osorio, Rafael Guerreiro & Tsukada, Raquel, 2012. "Privatization and Renationalization: What Went Wrong in Bolivia’s Water Sector?," World Development, Elsevier, vol. 40(12), pages 2564-2577.
    • Handle: RePEc:eee:wdevel:v:40:y:2012:i:12:p:2564-2577
    DOI: 10.1016/j.worlddev.2012.05.032
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    References listed on IDEAS

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    Cited by:

    1. Ronn Pineo, 2016. "Progress in Bolivia: Declining the United States Influence and the Victories of Evo Morales," Journal of Developing Societies, , vol. 32(4), pages 421-453, December.
    2. Ouda, Omar K.M. & Al-Waked, Rafat F. & Alshehri, Abdulrahman A., 2014. "Privatization of water-supply services in Saudi Arabia: A unique experience," Utilities Policy, Elsevier, vol. 31(C), pages 107-113.
    3. repec:hal:journl:hal-01023795 is not listed on IDEAS
    4. Wutich, Amber & Beresford, Melissa & Carvajal, Cinthia, 2016. "Can Informal Water Vendors Deliver on the Promise of A Human Right to Water? Results From Cochabamba, Bolivia," World Development, Elsevier, vol. 79(C), pages 14-24.
    5. Cairns, Maryann R., 2018. "Metering water: Analyzing the concurrent pressures of conservation, sustainability, health impact, and equity in use," World Development, Elsevier, vol. 110(C), pages 411-421.
    6. Lazzarini,Sergio G., 2022. "The Right Privatization," Cambridge Books, Cambridge University Press, number 9781316519714, November.
    7. Gabriella Carolini & Daniel Gallagher & Isadora Cruxên, 2018. "The promise of proximity: The politics of knowledge and learning in South–South cooperation between water operators," Environment and Planning C, , vol. 36(7), pages 1157-1175, November.
    8. Saiani, Carlos & Azevedo, Paulo Furquim de, 2018. "Is privatization of sanitation services good for health?," Utilities Policy, Elsevier, vol. 52(C), pages 27-36.
    9. Post, Alison E. & Murillo, María Victoria, 2016. "How Investor Portfolios Shape Regulatory Outcomes: Privatized Infrastructure After Crises," World Development, Elsevier, vol. 77(C), pages 328-345.
    10. Estrin, Saul & Pelletier, Adeline, 2018. "Privatization in developing countries: what are the lessons of recent experience?," LSE Research Online Documents on Economics 87348, London School of Economics and Political Science, LSE Library.
    11. repec:hal:journl:dumas-00811476 is not listed on IDEAS
    12. Massimiliano Agovino & Massimiliano Cerciello & Antonio Garofalo & Loris Landriani & Luigi Lepore, 2021. "Corporate governance and sustainability in water utilities. The effects of decorporatisation in the city of Naples, Italy," Business Strategy and the Environment, Wiley Blackwell, vol. 30(2), pages 874-890, February.
    13. Alper Demirdogen, 2023. "Before Privatization There was Its Impact: Sugar Factories in Turkey," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 62(2), pages 199-218, March.
    14. 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.
    15. Estrin, Saul & Pelletier, Adeline, 2016. "Privatisation in Developing Countries: What Are the Lessons of Recent Experience?," IZA Discussion Papers 10297, Institute of Labor Economics (IZA).
    16. Swann Bommier & Cécile Renouard, 2014. "On Equity in India's Water Supply Public-Private Partnerships," Working Papers hal-01023795, HAL.
    17. Bommier, Swann & Renouard, Cécile, 2014. "On Equity in India's Water Supply Public-Private Partnerships," ESSEC Working Papers WP1411, ESSEC Research Center, ESSEC Business School.

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