Issues We Work On

Water Privatization

In the past two decades, water privatization — turning over some or all of the assets or operations of a public system to a private company — has been growing rapidly, as has concern and opposition to privatization.   The Pacific Institute has been a leader in evaluating, reviewing, and assessing the complex advantages and disadvantages of these strategies.  While privatization can offer certain benefits under certain circumstances, there are also considerable risks to the public interest, to water resources systems, and to the environment that require strong government oversight.

To help improve this oversight, our water and privatization work has developed a set of standards to guide privatization and public/private agreements. Described by the Financial Times Global Water Report as “The Pacific Institute Principles,” these principles are described in detail in The New Economy of Water and call for: protecting public ownership of water rights, including marginalized communities in decision-making, taking into account the impacts on downstream communities and the environment, and ensuring that water quality is protected.

The Pacific Institute has also conducted reviews of the experience of specific privatization efforts or arrangements around the world, from Stockton, California, to Manila, the Philippines, to cities in Africa. The Institute’s research suggests that privatization is not the bright line dividing success and failure in municipal water systems. Privatization or public-private partnerships can play a role in bringing water services to those without or improving service in areas that need capital investment. But, we must ensure that any agreements don’t undercut the public interest, harm the environment or lock municipalities into unfair and unsafe deals.

To learn more about the Institute’s research on the factors that do improve cost-effectiveness and efficiency, see Beyond Privatization: Restructuring Water Systems to Improve Performance.

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