Introduction: From ‘Retreat of the State’ to ‘Retreat of the Market’?

Abstract

Abstract Control of water supply is an emotive subject, and privatization of water supply inevitably controversial. Around the world, reference is made to the British experiment with water privatization—in some cases as a salutary example, in others as a warning. Why is the British case of privatized water supply of such interest globally? In part, it has drawn attention because of its innovative model of privatization: vertically integrated, equity-financed, monopoly provision of water supply by private corporations. No other country has completely privatized its water supply and sewerage systems through the creation of publicly listed corporations of comparable size. The result is a unique industry: large, private monopolies organized at the scale of river basins, with some of the highest connection rates in the world. The dominance of English water supply companies in the rapidly growing global ‘private sector participation’ water supply sector has also drawn attention to their domestic market. Of equal importance is the unique regulatory framework applied to water (and other network utility industries); ‘price cap’ regulation, and comparative competition are regulatory techniques which are increasingly widely applied beyond Britain. Finally, the outcomes of privatization, and the criteria for evaluating the performance of the privatized companies, remain open to dispute.