ABSTRACT
The word ‘market’ is synonymous with the private sector, but the public sector also adopts market-type approaches to achieve improved performance. This chapter includes discussion on the use of the private sector; but first it covers the more general aspects of market forces. There is an important distinction to be made between private organizations that are in business to make a profit for their shareholders, but importantly have to deliver what the customers want or go out of business, and the use of market-type forces to improve the efficiency of water utilities. There are degrees to which the public sector emulates private operations. In The Netherlands, publicly owned water companies are required to operate to private-sector accountancy rules; but they do not pay dividends to their local authority shareholders. In parts of Australia, provincial states require state-owned companies to be the exact equivalent of private-sector companies. Such companies are exposed to full tax rules and required to pay dividends to the state.
