Water Policy 5 Number 4 369-380 (2003)

Efficiency effects of "privatization" in Argentina's water and sanitation services

Antonio Estache and Lourdes Trujillo

Corresponding author. World Bank Institute, The World Bank, 1818 H St NW, Washington, DC 20473, USA. (Tel: +1 202 458 1442, fax: +1 202 676 9874. E-mail: aestache@worldbank.org) and ECARES, Universite Libre de Bruxelles, Brussels, Belgium

Departamento de Análisis Económico Aplicado, Universidad de las Palmas de Gran Canaria, 4 Saulo Torón, E-35017 Las Palmas, Canary Islands, Spain.

This paper provides a "back-of-the-envelope" assessment of the efficiency effects of the reforms of the water sector in Argentina. Private operators are now key players in 15 of Argentina’s provinces. While all have adopted incentive based regulatory regimes which require estimates of economic efficiency changes, none have actually issued any estimate yet. This paper provides upper bounds estimates of efficiency gains achieved for four operators. The paper concludes with a discussion of the implication of the results for regulatory accounting and data collection processes by regulators in developing countries relying on incentive based regulatory systems.

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