Private participation in the provision of water in Antioquia (Colombia)

David Tobón Orozco

No 33, Grupo Microeconomía Aplicada from Universidad de Antioquia, Departamento de Economía

Abstract: In Colombia, in spite of the changes carried out with the reform of 1994, in the sector of drinking water the structural problems persist in many municipalities. They are associated to the quality, efficiency, continuity, coverage, and availability of the resource ; besides, the goals of reducing costs, enlarging investments, promoting competition, and expanding coverage have not been achieved satisfactorily. It was thought that with the participation of the private sector there would be an enormous advance, but the results are not the expected ones. However, the national government’s proposals keep digging blindly in this direction without assessing the errors of the present system. This paper studies in depth this reality: it presents the results obtained in five municipalities of Antioquia (Andes, Caucasia, Puerto Berrio, Rionegro and Turbo) where the operation of the aqueduct systems was delegated, from 1997, onto the private sector or to mixed-economy companies. The problems associated with the establishment of operation and management contracts are emphasized, in view of the fact that they are incomplete by nature and thus generate inertial and insufficient behaviours on the part of both the private agents and the municipalities that own these systems, something which hampers greatly the solution of the sector's structural problems.

Keywords: Water; private provision; incomplete contracts; incentives. (search for similar items in EconPapers)
JEL-codes: D42 D82 D86 G18 (search for similar items in EconPapers)
Pages: 12 pages
Date: 2006
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