ABSTRACT
This chapter assesses what is known regarding the relationship between the ownership and performance of municipal water utilities. It examines the theoretical models predicting that private firms will outperform public ones. The chapter discusses how the theoretical economic literature predicts that private ownership will exhibit higher levels of efficiency than public ownership. It demonstrates that the empirical literature is lacking in conclusive evidence that privately owned water utilities are more efficient than comparable publicly owned water utilities. The empirical evidence on the impacts of the British privatisation is definitely mixed. In France, municipalities have the legal authority to supply water or to delegate that responsibility to another party. The privatisation of water and sewage utilities in England and Wales has been the largest effort so far to sell off public water agencies. Furthermore, the recent trend towards mutualisation in the English and Welsh water industry suggests a move away from privatization.
