This dissertation explores institutional designs for public private partnerships in water supply systems in case of developing countries. Quantitative and qualitative methods are used to derive generalizable findings. In most cities of developing countries water utilities are, currently, publicly managed. The quality of service is poor with high quantity of water lost to leakages, a few hours of running tap water each day, and a large population living outside coverage area. Most public utilities are over-staffed, charge tariff insufficient to recover maintenance costs and depend on huge budgetary support from the government. With population in cities rising, governments in developing countries are becoming increasingly concerned about improving and sustaining water supply services.
Public Private Partnerships (PPP) have been one of the reforms model attempted in several developing countries but its outcome has been mixed. The difficulties associated with PPP in water supply in several countries, as experienced over last two decades, has led many scholars to believe that institutional designs are crucial for PPP to succeed, particularly with respect to contract design, credible commitments and overcoming of principal agent related problems of information asymmetry and incentives alignment. This dissertation uses quantitative and qualitative methods to analyze and explore institutional designs suitable for PPP in water supply. The research finds that overall institutional environment (non-water specific) in the country could impact cost efficiency of public sector run utility in non-intuitive ways. As for example, high level of property rights security in a country/region is found to be positively associated with cost efficiency but higher level of business freedom is not necessarily positively associated. Importantly, private sector ownership of utilities, by itself, does not appear to contribute significantly to cost efficiency.
Case study method is used to explore, drawing from experience of Manila, Tirupur and Delhi, institutional designs which are suitable for PPP in water supply. Manila and Tirupur serve as examples of PPP models which were adopted and are currently operational. Delhi serves as a counterfactual—–as a city where PPP failed to be adopted and the utility is run by public sector agency. Some of the key findings of the study are: understanding culture and history is important for planning water supply service reforms, relational contracts are favorable for PPP in water supply, autonomous and competent regulator embedded into contracts are preferable, transparency and consumer inclusion are critical for allying accountability concerns and rate of return regulation with periodic rebasing could serve well in developing country context. Policy recommendations are made at the end of the dissertation to the specific context of India.
|Advisor:||Brock, Gerald W.|
|Commitee:||Cordes, Joseph J., Forrer, John, Jagannathan, N Vijay, Kee, James E.|
|School:||The George Washington University|
|Department:||Public Policy and Public Administration|
|School Location:||United States -- District of Columbia|
|Source:||DAI-A 70/06, Dissertation Abstracts International|
|Subjects:||Economics, Public administration|
|Keywords:||India, Institutional economics, PPP, Philippines, Public-private partnerships, Regulatory economics, Urban water supply|
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