This book demonstrates that, when reforming the water sector, policymakers should arrange social policies that mitigate the negative impact of reforms. It presents a detailed analysis of the current issues, and uses country studies to show how social policies are vital in ensuring affordable access to water supply.

Increasing coverage and maintaining infrastructure are two of the biggest challenges confronting the water supply sector in both industrialized and developing countries. The last two decades have witnessed reform in this sector that has resulted in increased private sector participation (PSP), and it is now time to investigate whether such reform has managed to increase access without creating additional burdens, especially on the poor. A research project carried out by the United Nations Research Institute for Social Development (UNRISD), Social Policy, Regulation and Private Sector Involvement in Water Supply, has demonstrated the shortcomings of concession-type contracts and how regulation in developing countries is faced with major challenges. Based on this research, the present paper demonstrates that, in such circumstances, regulation should be complemented by social policies when reforming the water sector. This paper draws lessons from seven country studies: Brazil, Burkina Faso, Colombia, Great Britain, France, Hungary and Malaysia. All of these country studies show the shortcomings of PSP and how social policies are crucial in addressing the issues of access and affordability. The choice of social policies varies from country to country. In France and Great Britain, heavy public investment was used to ensure universal access to piped water. In these countries, even with high regulatory capacity, social policies in the water sector have been crucial. For example, in France, they consist mainly of ex-post assistance to those who cannot afford to pay their water bills, operating a fund for rural water supply and prohibition of disconnection. Social policies in Great Britain include income support based on property values, subsidies, a ban on disconnections, various forms of social security support and social assistance in paying water bills. In addition, there exists an effective and independent economic regulatory body. In the case of Colombia, a subsidy helps provide the poor with access to affordable water. In addition, investment commitments prescribed to the private sector have been useful in increasing coverage. Similarly, in Brazil, the desire to make water supply universal led to heavy investment in the 1970s, and effective social policies (cross-subsidies) helped to increase coverage among the poor. However, the current impasse on whether the state or municipality has the right to grant concessions to the private sector is jeopardizing further progress. The government in Hungary provides subsidies to regions that have high production costs. In addition, industrial users cross-subsidize domestic consumption, and income transfers by central or local authorities shoulder some of the households' burden of water expenditures. Tariffs are kept low (a "hidden" social policy) and no disconnection is allowed in the case of non-payment of bills. The private sector has increased efficiency in the system, but investment is financed by the state. In Malaysia, the social policies that are in place comprise state financing of water supply in rural areas, cross-subsidy (industrial users to domestic) and a lifeline block tariff. In addition, the private sector is contractually obliged to increase coverage in urban and rural areas. In Burkina Faso, although the efficiency of the network has substantially improved with commercialization through PSP, there is growing pressure to dismantle social policies.

This book explores the interface between environmental and social elements of water pricing policies in OECD countries. It focuses on the affordability of water services, as well as on the social measures aimed at resolving these affordability problems.

Part of OECD Water Resources and Sanitation Set - Buy all four reports and save over 30% on buying separately! Water is a key prerequisite for human and economic development, and for maintaining ecosystems. However, billions of people lack access to water and sanitation services, mainly due to poor governance and inadequate investment and maintenance. The situation is becoming more urgent due to increasing pressure, competition and even conflict over the use of water resources. The OECD has been working over the last two years to address these challenges. The results are summarised in this report, which emphasises the economic and financial aspects of water resources management and water service provision, the need for an integrated approach (including governance considerations) to address these complex policy challenges, and the importance of establishing a firm evidence base to support policy development and implementation. This report examines: strategic financial planning for water supply and sanitation that balances the key sources of revenues for the water sector – the “3Ts” of taxes, tariffs and transfers; the design and implementation of water pricing strategies that balance financial sustainability with other policy objectives; recent developments in private sector participation in the water sector; and trends and the future outlook of water use in agriculture. It considers both developing and OECD countries and offers concrete recommendations and checklists for action. The report is an invaluable resource for policy makers, academics, NGOs and all others interested in the challenges facing the water sector today.

There is no question that water pricing and public-private partnership can improve water management practices in the future. However, this concept is neither the cure-all many proponents argue, nor the disaster its opponents forecast. Providing a comprehensive and objective assessment of what does and does not work, where, why and under what circumstances, this informative collection assesses the social, economic, equity and institutional implications. This cohesive set of carefully selected essays, the result of The Third World Centre for Water Management and the Inter-American Development Bank's decision to objectively and critically assess the experiences in these areas, transcends the current dogmatic debate on these complex issues. Providing an in-depth analysis and assessment of the main issues and constraints of water pricing, private sector participation and their affect on water supply, the collection draws on illustrative case studies from Argentina, Brazil, the USA and Western European countries amongst others. This is a special issue of the Journal of Water Resource Development.

In the early 1990s Mexico City's Federal District (the D.F.) initiated a series of service contracts with four operators in the private sector, each to be implemented in three stages over ten years. The idea was to introduce competitive pressures and to find out if a "gradualist" aaproach would reduce social and political opposition to private sector involvement and would allow the government to address pricing problems and strengthen regulatory arrangements.