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Citation Information

Type Journal Article - World Development
Title Privatization and Renationalization: What Went Wrong in Bolivia’s Water Sector?
Volume 40
Issue 12
Publication (Day/Month/Year) 2012
Page numbers 2564-2577
URL http://www.inesad.edu.bo/bcde2009/A3 Hailu Osorio Tsukada.pdf
This paper investigates the concentration of access to safe water across income levels in Bolivia. In particular, it focuses on how privatization has changed coverage, affordability and concentration of access to water to the poor. We compare the performance of two privatized cities (La Paz and El Alto) with a cooperative managed (Santa Cruz de la Sierra) and a publicly provided one (Cochabamba). We examine the pre- and post-privatization periods. Close inspection of the household surveys reveals that access to water by low-income consumers increased during the periods of provision under private concessions. Coverage has expanded significantly in the bottom quintiles of the population in the privatized cities, translating into a more equitable access to water. The state, however, renationalized the water utility. What went wrong then in Bolivia's water sector? The answer is that the private concessionaire failed to meet the consensual targets stipulated in the contract. The tariff increases required for full cost-recovery has eventually led to public outrage and forced the government to terminate the contract.

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