Getting the Private Sector Involved in Water--What to Do in the Poorest of Countries
Author: Penelope J. Brook Cowen Date: 1/1/1997 (PDF, 200KB)
Countries suffering from low incomes, limited administrative capacity, and an unfavorable government track record--some of the poorer countries of Central and Eastern Europe, for example, or Sub-Saharan African countries emerging from long periods of internal conflict--struggle to attract private investors to their water sectors. The settings they offer are not conducive to the large, long-term sunk costs characteristic of water sector investments. But there are a number of ways to reduce the costs of contracting and increase the attractiveness of deals. Penelope J. Brook Cowen assesses the strengths and weaknesses of some of the options, including building up from a management contract to a full concession in a two-step approach, simplifying contracts, contracting out some regulatory functions, and increasing the predictability of regulatory discretion.