Has the Bubble Finally Burst? A Comparative Examination of the Failure of Privatization of Water Services Delivery in Atlanta (USA) and Hamilton (Canada)

Abstract

The last few years have witnessed significant attempts by a number of municipalities across the globe to reverse private sector involvement in water services delivery to citizens, with examples across North America, Europe, as well as in some developing countries. What makes this reversal of private sector participation in water services delivery baffle many is that, in the not too distance past, private sector involvement in water delivery was touted as a better service delivery option for municipalities. It was seen as a panacea for the perceived inefficiency, ineffectiveness, and unaccountable nature of the public sector. Why are municipalities de-privatizing their water services delivery? Did the promises of privatization fail? This article argues that the privatization of water services delivery was based on the (false) premise of the market being more efficient and effective, which would enable governments to save costs and lead to the emergence of a competitive environment in a monopolistic industry. It seems, therefore, that the private sector failed in no uncertain terms with respect to its promises to deliver. This argument will be supported using two cases drawn from Canada and the United States.