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The Late Embrace of Urban Water Service
Privatization in India: A Political Economy
Explanation
Gregory PierceDepartment of Urban Planning
University of California, Los [email protected]
Research QuestionWhich factors at the national and state level have enabled private sector participation (PSP) to emerge as a viable alternative to the public sector in India?
Literature Contributions• Developing country privatization campaigns
(Flynn and Mzikenge Chirwa, 2005; Barkin and Klooster, 2006; de Gouvello et al, 2012)
• Indian water privatization (Gopakumar, 2010; Sarangi, 2010; Mahalingam, Devkar and Kalidindi, 2011)
• Regional and city determinants of the decision to privatize (Hefetz and Warner, 2011; Picazo-Tadeo 2012)
Real GDP Per Capita, 1970-2011
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
2009
0
200
400
600
800
1000
1200India
South Asia
Low-Income Countries
US
$
Indian Foreign Direct Investment, 1970-2011
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
2009
-10000
0
10000
20000
30000
40000
50000
Mil
lions
US
$
Key Water Sector Developments
1992 - Constitutional amendment
2002 - Second national water policy
2005 - Nehru Urban Renewal Mission (JNNURM)
2011 - Twelfth national plan
Distinctives of Indian Privatization
Data: 38 cases of urban water private sector participation in 12 states and Union Territories, 1992-2011
GeographyLow and Middle Income Nations
India
Take-off Mid 1990s Mid 2000s
SpreadFast, national impetus
Slow, mediated by states
RemitFrom distribution to infrastructure
From infrastructure to distribution
Firms Involved
Primarily foreignMix of domestic and foreign
Variable Name Description
Population* (p=.01)
Number of people living in the state
Income (p=0.43)
Per capita net state domestic product
Urban Water Access (p=0.72)
Percentage of urban households with access to safe drinking water
BJP* (p=0.10)
1= BJP won last 2 state elections as sole party or major coalition partner;
0= BJP did not* p<.10
State ModelLogistic model predicting likelihood that a state has at least one PSP initiative:
Policy Implications• Private sector participation in water is likely to
increase, despite virulent opposition
• Shift to distributive schemes defies the international climate but reflects the increasing role of domestic firms
• As regional parties gain influence, what is their impact on private sector participation?
Research Directions• Explore the roles of resistance and contract
revision in large-N study
• Use a control group to find political-economic determinants of decision to privatize
• Analyze connection between key contract terms and household access
