by Katrina Kosec

CESifo Economic Studies (2012) 58 (2): 450-470.

Abstract

This article discusses the potential of private sector participation (PSP) to improve the urban water supply in South Asia. I first provide background on the literature linking a safe and adequate water supply with malnutrition, morbidity, and mortality. To better understand the selection mechanism underlying the decision to undergo PSP, I then analyze factors associated with the award of private water contracts worldwide. I next present empirical evidence that PSP in water is associated with a lower incidence of diarrheal disease and higher rates of access to piped water among young children in urban Africa. Finally, I conclude by reviewing the South Asian context and its limited experiences with PSP in water, raising questions for future research.