State versus Private Sector Provision of Water Services in Africa: A Statistical, DEA and Stochastic Cost Frontier Analysis

Colin Kirkpatrick, David Parker and Yin-Fang Zhang

No 30604, Centre on Regulation and Competition (CRC) Working papers from University of Manchester, Institute for Development Policy and Management (IDPM)

Abstract: Under pressure from donor agencies such as the World Bank, a number of developing countries have experimented with the privatisation of water services. This study reviews the existing econometric evidence on the effects of water privatisation in developing economies before presenting new results using statistical, data envelopment analysis (DEA) and stochastic cost frontier techniques and data from Africa. The study finds evidence of better performance in private utilities compared to state-owned utilities according to the statistical and DEA performance measures. But no statistically significant cost differences were discovered between private and public suppliers in the stochastic cost frontier analysis. The paper then considers reasons why water privatisation may prove problematic in lower-income economies, identifying the technology of water provision and nature of the product, transaction costs and possible regulatory weaknesses. However, a second-stage cost function analysis introducing a regulatory variable produced statistically insignificant results.

Keywords: Resource/Energy; Economics; and; Policy (search for similar items in EconPapers)
Pages: 31
Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
https://ageconsearch.umn.edu/record/30604/files/cr040070.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:idpmcr:30604

DOI: 10.22004/ag.econ.30604

Access Statistics for this paper

More papers in Centre on Regulation and Competition (CRC) Working papers from University of Manchester, Institute for Development Policy and Management (IDPM) Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().