Thirty years after water privatization - Is the English model the envy of the world?

Abstract

The paper considers whether water privatization 30 years ago has delivered the promised superior performance to nationalization, which remains the dominant model in Europe. The paper sets out the arguments at privatization, in particular in relation to efficiency, the managerial incentives, the role of private-sector balance sheets in facilitating investment, and the impacts on the cost of capital. Alternative explanations of relative performance, notably the regulation model adopted, are highlighted, and the paper concludes by outlining an alternative model of water regulation which better marries up public responsibilities and private incentives.