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Water nationalization: network access, quality, and health outcomes

Author

Listed:
  • Fernando Borraz

    (Banco Central del Uruguay y Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)

  • Nicolás Gonzalez Pampillón

    (Universidad de Montevideo)

  • Marcelo Olarreaga

    (University of Geneva and CEPR)

Abstract

In the case of natural monopolies there tends to be a trade-off between a higher quality of output provided by private firms, and a better access for poor consumers provided by public firms. This is partly the reflection of differences in objectives by private and public firms. The former tend to be product-driven, whereas the latter tend to base decisions on political agendas (Chong and Lopez de Silanes, 2005). The objective of this paper is to explore the impact on network access, water quality, and health outcomes of Uruguay's nationalization of water services. An important advantage of focusing on nationalization rather than privatization is that it avoids selection bias due to cherry-picking by firms or governments at the time of privatization. Indeed, nationalization in Uruguay affected all previously privatized firms, as water was declared "part of the public domain". Results suggest that the change in ownership led to an increase in the sanitation rate, as well as improvements in water quality. It was also accompanied by a decline in water-related child mortality, although this latter effect tends not to be statistically significant across specifications.

Suggested Citation

  • Fernando Borraz & Nicolás Gonzalez Pampillón & Marcelo Olarreaga, 2011. "Water nationalization: network access, quality, and health outcomes," Documentos de Trabajo (working papers) 1811, Department of Economics - dECON.
  • Handle: RePEc:ude:wpaper:1811
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    File URL: https://hdl.handle.net/20.500.12008/2208
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    References listed on IDEAS

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    1. Bergman, Mats A. & Johansson, Per & Lundberg, Sofia & Spagnolo, Giancarlo, 2016. "Privatization and quality: Evidence from elderly care in Sweden," Journal of Health Economics, Elsevier, vol. 49(C), pages 109-119.

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    More about this item

    Keywords

    minimum wage; wage inequality; IV; semiparametric estimation;
    All these keywords.

    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I10 - Health, Education, and Welfare - - Health - - - General
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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