Privatization in the Water Industry

Abstract

Throughout the world, privatization of water supply and the sewerage services is a controversial topic of political debate. Any nationalization, privatization, municipalization, or alteration in the regulatory regime constitutes a significant change of the institutional mechanism of water management. This article, based on a comparative analysis of water management institutions in selected member states of the European Union, addresses water supply and sewerage services in conurbations with centralized supplies. A brief characterization of water services and the water industry is provided in the context of global water policy developments. Three typical regulatory models are described: the British, based on centralized public policy and surrogate competition by statistical comparison; the French, based on competition for temporary monopolies; and the German or middle-European, based on competition for goods and services and control of limited operational monopolies. A typology of privatization is also presented. This article does not seek to argue that one model is better than another.