Public versus private water delivery, remunicipalization and water tariffs

Abstract

Evidence regarding the drivers and the effects of remunicipalization remains in short supply. In this paper we exploit existing analyses of earlier historical phases of the remunicipalization of water delivery services to disentangle the role played by a range of different factors - most notably overpricing and corruption under private ownership - in the decision to remunicipalize these services. Additionally, we discuss what the effects of remunicipalization might be in the light of the, as yet, somewhat sketchy evidence. In the specific case of water tariffs, our analysis casts some doubt on whether the initial price reductions introduced following remunicipalization are sustainable over time.