Social Policies and Private Sector Participation in Water Supply: Beyond Regulation

This collection makes an important contribution to the understanding of the conditions required for the successful implementation of social policies in the water and sanitation sector. This is very relevant, because overcoming the global crisis that affects the organisation and provision of these essential services is one of the crucial challenges for development policy and action in the twenty-first century.

The book examines experiences of private-sector participation (PSP) in the provision of water and sanitation, highlighting crucial aspects of social policy. It is based on research carried out by the United Nations Research Institute for Social Development (UNRISD) which focused on ‘how and why social policies can ensure affordable access to water [provided by private operators] while independent regulatory instruments are still being developed’ (p. 4). The book aims to respond to several questions: ‘how do social policies address issues of affordability and access? What is the role of tariffs [...]? How are policies designed to help the poor [...]? Are the poor able to benefit [...]? And, more generally, how can [the] private sector be used to serve poor customers (p. 4)?’ In order to achieve their objectives, the authors adopted a conceptual framework whereby social policy is defined as state intervention informed by the principle of equity, ‘which addresses concerns of justice, equality, and rights’ (pp. 4–5). The editor, Naren Prasad, argues that regulation, an ambiguous concept with multiple meanings, and particularly the type of regulation that has characterised the recent expansion of PSP in water services, is insufficient to guarantee that these services will actually benefit the poor, and therefore it needs to be complemented with social policies, especially in ‘developing and transition economies’(p. 5).

The work is composed of eight chapters. Chapter 1 provides an editorial introduction, including the theoretical framework, the research questions, a brief historical review of social policies in the water sector, and a summary of the main findings and conclusions. It is followed by seven chapters covering the experiences of France, Great Britain, Colombia, Brazil, Malaysia, Hungary, and Burkina Faso. Among the key findings identified, it is worth highlighting the following. (1) The provision of basic infrastructure services such as water supply is a prerequisite for social and economic development and constitutes a state responsibility. (2) The main challenges facing the international community in relation to these services include (a) the need for sound financial arrangements to expand and maintain the infrastructure; (b) improving the management capacity of water-service utilities to enhance efficiency and productivity; (c) prioritising socio-political considerations such as affordability, transparency, and accountability; and (d) properly addressing the links between water and sanitation, the environment, and public health. (3) On the subject of the expansion of PSP in water services since the 1990s, the book recounts how private water companies went to countries that already had achieved high levels of coverage, while the countries in Africa or Asia where investment needs are greater attracted significantly less private interest. (4) Many developing countries accepted the introduction of PSP because of ‘the influence and persuasiveness of international donors [such as] the World Bank’ and their policies of decentralization and privatization (pp. 14–16). (5) Despite the fact that these PSP policies had disappointing results and attracted much criticism worldwide, international donors continue to insist on implementing these initiatives, currently ‘repackaged in different terminologies’ (p. 17). (6) The main editor concludes that ‘expenditure in water supply, rather than creating regulatory bodies, would be more effective in increasing coverage’ (p. 31), which conveys the message that effective social policies that cater for the needs of the poor and the excluded should be prioritised over managerial and market-driven initiatives.

There are some flaws in the book that deserve attention, although they do not affect the power of its main conclusions. One problem is that although the introduction rightly takes a long-term perspective to explore the historical role of PSP in water services, most chapters do not, and this creates an imbalance in the analysis. This has led to some problematic statements, for example that ‘PSP is a relatively new phenomenon in developing countries’ (p. 3), while in practice PSP in water services was already one of the early industrial exports from England, France, and other developed countries in the nineteenth century.

Similarly, the introduction refers to existing debates about issues such as the status of water for essential human use: is it a commodity, a merit or public good, or a social or human right? (pp. 8–10), but the treatment of this subject has been left underdeveloped and largely ignores the vast existing literature on the matter. Likewise, most of the chapters fail to relate the discussion of the individual cases to the wider literature, which is particularly regrettable for the chapters on Latin America. Finally, there are a number of mistakes, ambiguities, and over-generalisations that could have been avoided. For instance, there are some unsupported and contradictory arguments, such as the proposition that the reasons for the introduction of PSP in Latin America were ‘excessive political interference in public utilities and corrupt government’ (p. 13), the already-mentioned ‘influence and persuasiveness of international donors’ (p. 14), or ‘poor management and the lack of sufficient capital’ (p. 24). But there is no proper discussion about which of these reasons best explains the expansion of PSP, or in what degree, which would have been an important contribution to the on-going debate.

Finally, I found also problematic the fact that the almost single reference to ‘sociopolitical issues’ was limited to the ‘affordability, transparency and accountability’ of water services (p. 2), when much of the material presented in the book constituted substantial grounds for an in-depth discussion of the politics of water services. As a result, perhaps, the book’s conclusions are somewhat ambiguous, because it seems to argue that the solution to the crisis of water services lies in better social policies, which leaves out of the analysis more crucial issues such as the need to democratise water policy and management in general. These criticisms are offered as a constructive contribution to the authors, whose book represents a significant addition to our stock of knowledge on the subject matter.