Governance and Efficiency in Brazilian Water Utilities: An Analysis Based on Revenue Collection Efficiency

Abstract

This study analyzed the relevance of governance structure for efficient revenue collection by Brazilian water utilities (WUs). Data were collected from the National Information System on Sanitation (SNIS) for 127 Brazilian WUs, covering a balanced longitudinal panel from 2018 to 2022. The governance structures evaluated included ownership (public or private) and corporatization (publicly traded or not). We searched scientific databases and did not find any studies on the efficiency of specific WUs in collecting customer bills for services rendered and its relationship with this type of governance; thus, this is the main innovative contribution of this study to the literature. In the first stage, this study utilized the dynamic slack-based model (DSBM) to assess revenue collection efficiency. In the second stage, an econometric model with generalized estimating equation (GEE) was used to explain the efficiency. The findings revealed a global average inefficiency in revenue collection of 50.47%. Corporatization was linked to higher collection efficiencies, while ownership type was significantly linked with lower collection efficiency. Factors such as tariff accessibility, urbanization, and the COVID-19 pandemic also influenced efficiency. This study suggests that regulatory bodies should consider these insights to implement policies that prevent inefficiencies from affecting the tariff system for services.