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The World Bank Economic Review Advance Access published online on January 19, 2006
The World Bank Economic Review, doi:10.1093/wber/lhj001
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© The Author 2006. Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development / THE WORLD BANK. All rights reserved. For permissions, please e-mail: journals.permissions@oxfordjournals.org

Article

An Empirical Analysis of State and Private-Sector Provision of Water Services in Africa

Colin Kirkpatrick 1, David Parker 2 *, and Yin-Fang Zhang 3

1 Hallsworth Professor of Development Economics at the Institute for Development Policy and Management, School of Environment and Development, the University of Manchester, UK
2 Professor of Business Economics and Strategy at the School of Management, Cranfield University, UK
3 Lecturer in Economics at the Institute for Development Policy and Management, School of Environment and Development, University of Manchester, UK

* To whom correspondence should be addressed.
David Parker, E-mail: david.parker{at}cranfield.ac.uk


  Abstract

Under pressure from donor agencies and international financial institutions such as the World Bank, some developing countries have experimented with the privatization of water services. This article reviews the econometric evidence on the effects of water privatization in developing economies and presents new results using statistical data envelopment analysis and stochastic cost frontier techniques and data from Africa. The analysis fails to show evidence of better performance by private utilities than by state-owned utilities. Among the reasons why water privatization could prove problematic in lower-income economies are the technology of water provision and the nature of the product, transaction costs, and regulatory weaknesses.


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