DOES GREATER AUTONOMY IMPROVE PERFORMANCE? EVIDENCE FROM WATER SERVICE PROVIDERS IN INDIAN CITIES

Shreekant Gupta, Surender Kumar and Gopal K. Sarangi
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Shreekant Gupta: Department of Economics, Delhi School of Economics, Delhi, India
Gopal K. Sarangi: TERI University, New Delhi

No 205, Working papers from Centre for Development Economics, Delhi School of Economics

Abstract: We assess the efficiency of urban water supply in 27 Indian cities using data envelopment analysis (DEA). We also group cities by the management structure of their water utilities. Utilities with greater degree of functional autonomy perform better, supporting the hypothesis that more autonomy in management leads to better performance among water utilites. Our results also have implications for urban domestic water pricing--most of the utilities operate under decreasing returns to scale (DRS) implying water should be priced at marginal cost of supply.

JEL-codes: C14 H70 L38 L95 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2011-10
New Economics Papers: this item is included in nep-eff
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