Pacific Institute

Water Managers Must Look `Beyond Privatization`

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Untitled Document

Institute Finds the Six Questions Worth Asking; Privatization Not the Efficiency Silver Bullet

Water managers face significant challenges meeting the water supply, wastewater collection and treatment, and stormwater management needs of the communities they serve. Numerous solutions have been proposed, including privatization—the controversial action of significantly increased private sector involvement.

The debate over privatization overshadows discussion of the determinants of performance. Pacific Institute's report Beyond Privatization: Restructuring Water Systems to Improve Performance finds that public versus private is not the bright line that separates success from failure. Researchers Gary Wolff and Eric Hallstein found that performance depends on effective staffing, consistent public support for sufficient funding, better asset management systems, performance measurements and rewards, and more stakeholder involvement and transparency. When increased private involvement or changes in public operations create significant cost savings, as they have in some cases, it is because specific improvements were identifed and implemented in one or more of these categories.

'Beyond Privatization' provides a framework for urban and rural municipal-level public decisionmakers to assess problems, identify possible solutions, and choose among these solutions. It provides practical information and examples about improving the effectiveness of water, wastewater, and stormwater systems, whether public or private. To illustrate critical points, the report offers numerous examples from the upper Midwest: the US states of Illinois, Indiana, Iowa, Michigan, Minnesota, Ohio, and Wisconsin, and the Canadian province of Ontario.
However, the manual's lessons extrapolate to other regions of the United States, and beyond.

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