Efficiency in the management of urban water services. What have we learned after four decades of research?

Hacienda Publica Espanola

Volumn 185, Issue 2, 2008, Pages 39-67

  Gonzalez Gómez, Francisco ^a   García Rubio, Miguel Á ^a  

^a UNIVERSITY OF GRANADA   (Spain)

Author keywords

Efficiency; Firm behaviour; Water; Water utilities

Indexed keywords

EID: 56149105487     PISSN: 02101173     EISSN: 11339470     Source Type: Journal    
DOI: None     Document Type: Review

References (114)

1. Alchian, A. and H. Demsetz (1972), "Production, Information Cost and Economic Organization", American Economic Review, II-62, 777-795.
2. Allan, G. (2006), "Assessing capital efficiency in the water and sewerage industry in England and Wales: Ofwat's approach", Utilities Policy, 14, 224-233.
3. Anwandter, L. and T. JR. Ozuna (2002), "Can Public Sector Reforms Improve the Efficiency of Public Water Utilities?", Environment and Development Economics, 7(4), 687-700.
4. Antonioli, D. and M. Filippini (2001), "The Use of Variable Cost Function in the Regulation of the Italian Water Industry", Utilities Policy, 10, 181-187.
5. Ashton, J. K. (2000a), "Total Factor Productivity Growth and Technical Change in the Water and Sewerage Industry", The Service Industries Journal, 20(4), 121-130.
6. Ashton, J. K. (2000b), "Cost efficiency in the UK water and sewerage industry", Applied Ecanomics Letters, 7, 455-458.
7. Ashton, J. K. (2003), "Capital Utilisation and Scale in the English and Welsh Water Industry", The Service Industries Journal, 23(5), 137-149.
8. Aubert, C. and A. Reynaud (2005), "The Impact of Regulation on Cost Efficiency: An Empirical Analysis of Wisconsin Water Utilities", Journal of Productivity Analysis, 23, 383-409.
9. Ballance, A. (2006), "The regulation of capex in water", Utilities Policy, 14, 234-239.
10. Bel, G. (2006), Economía y política de la privatización local, Marcial Pons, Madrid, Spain.
11. Bhattacharyya, A.; P. Parker and K. Raffiee (1994), "An Examination of the Effect of Ownership on the Relative Efficiency of Public and Private Water Utilities", Land Economics, 70(2), 197-209.
12. Bhattacharyya, A.; T. R. Harris; R. Narayanan and K. Raffiee (1995a), "Specification and estimation of the Effect of Ownership on the Economic Efficiency of the Water Utilities", Regional Science and Urban Economics, 25, 759-784.
13. Bhattacharyya, A.; T. R. Harris; R. Narayanan and K. Raffiee (1995b), "Technical Efficiency of Rural Water Utilities", Journal of Agricultural and Resource Economics, 20(2), 373-391.
14. Bhattacharyya, A.; T. R. Harris; R. Narayanan and K. Raffiee (1995c), "Allocative Efficiency of Rural Nevada Water Systems: A Hedonic Shadow Cost Function Approach", Journal of Regional Science, 35(3), 485-501.
15. Bishop, M.; J. Kay and C. Mayer (1994), Privatization and Economic Performance, Oxford University Press, New York.
16. Bottasso, A. and M. Conti (2003), Cost Inefficiency in the English and Welsh Water Industry: An Heteroskedastic Stochastic Cost Frontier Approach, Mimeo, DIEM Università di Genova, Italy.
17. Brocklehurst, C. and J. G. Janssens (2004), Innovative contracts, sound relationships: urban water sector reform in Senegal, Water supply and sanitation sector board discussion paper series 1, The World Bank, Washington D.C.
18. Bruggink, T. H. (1982), "Public Versus Regulated Private Enterprise in the Municipal Water Industry: A Comparison of Operating Costs", Quarterly Review of Economics and Buciness, 22, 111-125.
19. Byrnes, P.; S. Grosskopf and K. Hayes (1986), "Efficiency and Ownership: Further Evidence", Review of Economics and Statistics, 68, 337-341.
20. Carpentier, A.; C. Nauges; A. Reynaud and A. Thomas (2006), "Effets de la délégation sur le prix de l'eau potable en France: Une analyse à partir de la littérature sur les effets de traitement", Economie et Prévision, 174(3), 1-20.
21. Casarin, A. A.; J. A. Delfino and M. E. Delfino (2007), "Failures in water reform: Lessons from the Buenos Aires's concession", Utilities Policy 15, 234-247.
22. Clark, R. M. and R. G. Stevie (1981), "A Water Supply Cost Model Incorporating Spatial Variables", Land Economics, 57(1), 18-32.
23. Coelli, T. J.; Estache, A.; Perelman, S. and Trujillo, L. (2003), "A Primer on Efficiency Measurement for Utilities and Transport Regulators", World Bank Publications, Washington, D.C.
24. Coelli, T. and D. Lawrence (Eds.) (2006), Performance Measurement and Regulation Network Utilities, Edward Elgar.
25. Coelli, T. and S. Walding (2006), "Performance Measurement in the Australian Water Supply Industry: A Preliminary Analysis", in Coelli, T. and D. Lawrence (Eds.) (2006), Performance Measurement and Regulation Network Utilities, Edward Elgar.
26. Corton, M. L. (2003), "Benchmarking in the Latin American Water Sector: The Case of Peru", Utilities Policy, 11, 133-142.
27. Cowan, S. (1993), "Regulation of Several Market Failures: The Water Industry in England and Wales", Oxford Review of Economic Policy, 9(4), 14-23.
28. Crain, W. M. and A. Zardkoohi (1978), "A Test of the Property-Rights Theory of the Firm: Water Utilities in the United States", Journal of Law and Economics, 21, 395-408.
29. Cubbin, J. and G. Tzanidakis (1998), "Regression versus Data Envelopment Analysis for Efficiency Measurement: An Application to the England and Wales Regulated Water Industry", Utilities Policy, 7, 75-85.
30. Cubbin, J. (2005), "Efficiency in the water industry", Utilities Policy, 13, 289-293.
31. Ducci, J. (2007), Salida de operadores privados internacionales de agua en América Latina, Inter-American Development Bank. Washington D.C.
32. Elnaboulsi, J. C. (2001), "Organization, Management and Delegation in the French Water Industry", Annals of Public and Cooperative Economics, 72 (4), 507-347.
33. Estache, A.; A. Gómez-Lobo and D. Leipziger (2000), Utility privatization and the needs of the poor in Latin America. Have we learned enough to get it right? Infrastructure for Development: Private Solutions and the Poor. London, UK.
34. Estache, A. and E. Kouassi (2002), Sector Organization, Governance, and the Inefficiency of African Water Utilities, World Bank Policy Research Working Paper 2890, September 2002. Washington, D.C.
35. Estache. A. and M. A. Rossi (2002). "How Different is the Efficiency of Public and Private Water Companies in Asia?", The World Bank Economic Review, 16(1), 139-148.
36. Estache, A. and L. Trujillo (2003), "Efficiency Effects of «Privatization» in Argentina's Water and Sanitation Services", Water Policy, 5(4), 369-380.
37. Estache, A. (2006), "PPI Partnerships vs. PPI Divorces in LDCs", Review of Industrial Organization 29, 3-26.
38. Fabbri, P. and G. Fraquelli (2000), "Costs and Structure of Technology in the Italian Water Industry", Empirica, 27, 65-82.
39. Faria, R. C.; G. Souza and T. B. Moreira (2005), "Public Versus Private Water Utilities: Empirical Evidence for Brazilian Companies", Economics Bulletin, 8(2), 1-7.
40. Feigenbaum, S. and R. Teeples (1983), "Public Versus Private Water Delivery: A Hedonic Cost Approach", Review of Economics and Statistics, 65, 672-678.
41. Ford, J. L. and J. J. Warford (1969), "Cost Functions for the Water Industry" Journal of Industrial Economics, 18, 53-63.
42. Foster, V. (2005), Ten years of water service reform in Latin America: Toward an Anglo-French model, Water supply and sanitation sector board discussion paper series 3, The World Bank, Washington D.C.
43. Fox, W. F. and R. A. Hofler (1986), "Using Homothetic Composed Error Frontiers to Measure Water Utility Efficiency", Southern Economic Journal, 53(2), 461-477.
44. Fraquelli, G. and V. Moiso (2005), Cost Efficiency and Scale Economies in the Italian Water Industry, Higher Education and Research on Mobility Regulation and the Economics of Local Services (HERMES), Working Paper, 8, Torino. Italy.
45. García Sánchez, M. I. (2006), "Efficiency Measurement in Spanish Local Government: The Case of Municipal Water Services", Review of Policy Research, 23(2), 355-371.
46. García-Valiñas, M. A. and M. A. Muñiz (2007), "Is DEA Useful in the Regulation of Water Utilities? A Dynamic Efficiency Evaluation (A Dynamic Efficiency Evaluation of Water Utilities)", Applied Economics, 39, 245-252.
47. Garcia, S. and A. Thomas (2001), "The Structure of Municipal Water Supply Costs: Application to a Panel of French Local Communities", Journal of Productivity Analysis, 16, 5-29.
48. Garcia, S. and A. Thomas (2003), "Regulation of Public Utilities under Asymmetric Information. The case of Municipal Water Supply in France", Environmental and Resource Economics, 26, 145-162.
49. Garcia, S.; M. Moreaux and A. Reynaud (2007), "Measuring economies of vertical integration in network industries: An application to the water sector", International Journal of Industrial Organization, 25, 791-820.
50. Gattoufi, S; M. Oral and A. Reisman (2004), "Data Envelopment Analysis Literature: A Bibliography Update (1951-2001)", Socio-Economic Planning Sciences, 38, 159-229.
51. González-Gómez, F. (2006), "¿Está justificada la privatización de la gestión del agua en las ciudades?" Ciudad y Territorio. Estudios Territoriales, 147, 139-157.
52. Hall, D. and E. Lobina (2004), "Private and Public interests in water and energy", Natural Resources Forum, 28, 268-277
53. Hall, D.; E. Lobina and R. de la Motte (2005), "Public resistance to privatisation in water and energy", Development in Practice, 15(3/4), 286-301.
54. Hayes, K. (1987), "Cost Structure of the Water Utility Industry", Applied Economics, 19, 417-425.
55. Hunt, L. C. and E. L. Lynk (1995), "Privatisation and Efficiency in the UK Water Industry: An Empirical Analysis", Oxford Bulletin of Economics and Statistics, 57(3), 371-388.
56. Kim, H. Y. (1987), "Economies of Scale in Multi-product Firms: An Empirical Analysis", Economica, 54, 185-206.
57. Kim, H. Y. and R. M. Clark (1988), "Economies of Scale and Scope in Water Supply", Regional Science and Urban Economics, 18, 479-502.
58. Kim, E. and H. Lee (1998). "Spatial integration or urban water services and economies of scale", Review of Urban and Regional Development Studies, 10(1), 3-18.
59. Kingdom, W. (2005), Models of aggregation for water and sanitation provision, Water supply & Sanitation Working Notes, 1, World Bank. Washington D.C.
60. Kirkpatrick, C.; D. Parker and Y. F. Zhang (2006), "An Empirical Analysis of State and Private Sector Provision of Water Services in Africa", The World Bank Economic Review, 20(1), 143-163.
61. Knapp, M. R. J. (1978), "Economies of Scale in Sewage Purification and Disposal", Journal of Industrial Economics, 27(2), 163-183.
62. Kuwabara, H. (1998), "Industrial Organization and Cost Analysis of Water Utilities", Journal of Public Utility Economics, 50, 45-54.
63. Lambert, D. K.; D. Dichev and K. Raffiee (1993), "Ownership and Sources of Inefficiency in the Provision of Water Services", Water Resources Research, 29 (6), 1573-1578.
64. Leibenstein, H. (1966), "Allocative Efficiency and X-Efficiency", The American Economic Review, 56, 392-415.
65. Lin, Ch. (2005), "Service Quality and Prospects for Benchmarking: Evidence from the Peru Water Sector", Utilities Policy, 13(3), 230-239.
66. Littlechild, S. (1986), "Economic Regulation of Privatized Water Authorities", Department of the Environment, HMSO, London.
67. Littlechild, S. (1988), "Economic Regulation of Privatised Water Authorities and Some Further Reflections", Oxford Review Economic Policy, 4, 40-68.
68. Lobina, E. (2005), "Problems with private water concessions: A review of experiences and analysis of dynamics", Water Resources Development, 21(1), 55-87.
69. Lobina, E. and D. Hall (2000), "Public Sector Alternatives to Water Supply and Sewerage Privatization: Case Studies", Water Resources Development, 16(1), 35-55.
70. Lynk, E.L. (1993), "Privatisation, Joint Production and the Comparative Efficiencies of Private and Public Ownership: The UK Water Industry Case", Fiscal Studies, 14(2), 98-116.
71. Mann, P. C. and J. L. Mikesell (1976), "Ownership and Water System Operation", Water Resources Bulletin, 12(5), 995-1004.
72. Mizutani, F. and T. Urakami (2001), "Identifying Network Density and Scale Economies for Japanese Water Supply Organizations", Papers in Regional Science, 80, 211-230.
73. Morgan, W. D. (1977), "Investor Owned vs. Publicly Owned Water Agencies: An Evaluation of the Property Rights Theory of the Firm", Water Resources Bulletin, 13(4), 775-781.
74. Mosheim, R. (2006), "A Shadow Cost Function Model of the US Water Industry Incorporating Water Quality and Ownership Effects", in Coelli, T. and D. Lawrence (Eds.), Performance Measurement and Regulation Network Utilities, Edward Elgar.
75. Mugisha, S. (2007), "Effects of incentive applications on technical efficiencies: Empirical evidence from Ugandan water utilities", Utilities Policy, 15, 225-233.
76. Nauges, C. and C. Van den Berg (2007), How "natural" are natural monopolies in the water supply and sewerage sector? Case studies from developing and transition economies, World Bank Policy Research Working Paper 4137. February, 2007. Washington D.C.
77. Nickson, A. and R. Franceys, (2003), Tapping the market: The challenge of institutional reform in the urban water sector, Palgrave Macmillan. Hampshire. New York:
78. OECD (2000), Global trends in urban water supply and waste water financing and management: changing roles for the public and private sectors, Centre for Co-operation with Non-members Environment Directorate. CCNM/ENV(2000)36/FINAL OECD. Paris.
79. OECD (2003), Improving Water Management, OECD. Paris.
80. Ohlsson, H. (2003), "Ownership and production costs: choosing between public production and contracting-out in the case of Swedish refuse collection", Fiscal Studies, 24, 451-476.
81. Picazo-Tadeo, A. J.; F. González-Gómez and F. J. Sáez-Fernández (2009), "Accounting for Operating Environments in Measuring Water Utilities' Managerial Efficiency", The Service Industries Journal, 29, forthcoming.
82. Picazo-Tadeo, A. J.; F. J. Sáez-Fernández and F. González-Gómez (2007), "The Role of Environmental Factors in Water Utilities' Technical Efficiency. Empirical Evidence from Spanish Companies", Applied Economics, in press, doi: 10.1080/00036840601007310.
83. Picazo-Tadeo, A. J.; F. J. Sáez-Fernández and F. González-Gómez (2008), "Does service quality matter in measuring performance of water utilities?", Utilities Policy, 16(1), 30-38.
84. Raffiee, K.; R. Narayanan; T. R. Harris; D. Lambert and J. M. Collins (1993), "Cost Analysis of Water Utilities: A Goodness-of-Fit Approach", Atlantic Economic Journal, 21(3), 18-29.
85. Rees, J. A. (1998), Regulation and private participation in the water and sanitation sector, Global Water Partnership Technical Advisory Committee, Backgrounds Papers 1. Stockholm, Sweden.
86. Renzetti, S. and D. Dupont (2003), Ownership and Performance of Water Utilities, The Journal of Corporate Environmental Strategy and Practice, 42, 9-19.
87. Saal, D.S. and D. Parker (2000), "The Impact of Privatization and Regulation on the Water and Sewerage. Industry in England and Wales: A Translog Cost Function Model", Managerial and Decision Economics, 21(6), 253-268.
88. Saal, D. S. and D. Parker (2001), "Productivity and Price Performance in the Privatized Water and Sewerage Companies of England and Wales", Journal of Regulatory Economics, 20(1), 61-90.
89. Saal, D. S. and D. Parker (2004), "The Comparative Impact of Privatization and Regulation on Productivity Growth in the English and Welsh Water and Sewerage Industry: 1985-1999", International Journal of Regulation and Governance 4(2), 139-70.
90. Saal, D. S. and D. Parker (2006), "Assessing the Performance of Water Operations in the English and Welsh Water Industry: A Lesson in the Implications of in Appropriately Assuming a Common Frontier", in Coelli, T. and D. Lawrence (Eds.), Performance Measurement and Regulation Network Utilities. Edward Elgar.
91. Saal, D. S.; D. Parker and T. G. Weyman-Jones (2007), "Determining the Contribution of Technical Change, Efficiency Change and Scale Change to Productivity Growth in the Privatized English and Welsh Water and Sewerage Industry: 1985-2000", Journal of Productivity Analysis, 28, 127-139.
92. Sabbioni, G. (2005), "Econometric Measures of the Relative Efficiency of Water and Sewerage Utilities in Brazil", Public Utility Research Center, University of Florida, May 10, 2005.
93. Sabbioni, G. (2008), "Efficiency in the Brazilian sanitation sector", Utilities Policy, 16(1), 11-20.
94. Sauer, J. (2005). "Economies of Scale and Firm Size Optimum in Rural Water Supply". Water Resources Research, 41, 1-13.
95. Sauer, J. and K. Frohberg (2007), "Allocative Efficiency of Rural Water Supply - A Globally Flexible SGM Cost Frontier", Journal of Productivity Analysis, 27, 31-40.
96. Shleifer, A. (1985), "A theory of yardstick competition", RAND Journal of Economics, 16(3), 319-327.
97. Sepälä, O. T.; J. J. Hukka and T. S. Katko (2001), "Public-Private Partnerships in Water and Sewerage Services. Privatization for Profit or Improvement of Service and Performance?", Public Works Management & Policy, 6(1), 42-58.
98. Seroa da Motta, R. and A. Moreira (2006), "Efficiency and regulation in the sanitation sector in Brazil", Utilities Policy, 14, 185-195.
99. Shaoul, J. (1997), "A Critical Financial Analysis of the Performance of Privatised Industries: The Case of the Water Industry in England and Wales", Critical Perspectives on Accounting, 8, 479-505.
100. Shih, J-S; W. Harrington; W. A. Pizer and K. Gillingham (2004), Economies of Scale and Technical Efficiency in Community Water Systems, Discussion Paper 04-15, Resources for the Future. Washington, D.C.
101. Shirley, M. (ed.) (2002), Thirsting for Efficiency: The Economics and Politics of Urban Water System Reform, Elsevier Press, Oxford.
102. Stone and Webster Consultants (2004), Investigation into evidence for economies of scale in the water and sewerage industry in England and Wales, Final Report. London.
103. Strategic Management Consultants (2002), Optimum entity size in the water industry of England and Wales: a review of factors which influence the size of companies. Northumberland, UK.
104. Takada, S. and R. Shigeno (1998), "Cost Structure of Water Supply in Japan: The Estimation of Economics of Density and Economies of Scale", Journal of Public Utility Economics, 50, 37-40.
105. Teeples, R. and D. Glyer (1987a), "Cost of Water Delivery System: Specification and Ownership Effects", Review of Economics and Statistics, 69(3), 399-408.
106. Teeples, R. and D. Glyer (1987b), "Production Functions for Water Delivery Systems: Analysis and Estimation Using Dual Cost Function and Implicit Price Specifications", Water Resources Research, 23(5), 765-773.
107. Thanassoulis, E. (2000a), "The use of data envelopment analysis in the regulation UK water utilities: Water distribution", European Journal of Operational Research, 126, 436-453.
108. Thanassoulis, E. (2000b), "DEA and its use in the regulation of water companies", European Journal of Operational Research, 127, 1-13.
109. Torres, M. and C. J. Morrison-Paul (2006), "Driving Forces for Consolidation or Fragmentation of the US Water Utility Industry: A Cost Function Approach with Endogenous Output", Journal of Urban Economics, 59, 104-120.
110. Tupper, H. C. and M. Resende (2004), "Efficiency and Regulatory Issues in the Brazilian Water and Sewage Sector: An Empirical Study", Utilities Policy, 12, 29-40.
111. Tynan, N. and B. Kingdom (2005), Optimal size for utilities? Returns to scale in water: evidence from benchmarking, Public Policy for the private sector, note 283, The World Bank. Washington, D.C.
112. Van den Berg, C.; S. Pattanayak; J.-C. Yang and H. Gunatilake (2006), Getting the assumptions right: private sector participation transaction design and the poor in Southwest Sri Lanka. Water supply and sanitation sector board discussion paper series 7. The World Bank. Washington D.C.
113. Vickers, J. and G. Yarrow (1988), "Regulation of Privatized Firms in Britain"; European Economic Review, 32, 465-472.
114. Woodbury, K. and B. Dollery (2004), "Efficiency Measurement in Australian Local Government: The Case of New South Wales Municipal Water Services", Review of Policy Research, 21(5), 615-636.