Open questions for public water management: Discussions from Uruguay's restatization process

Abstract

In Uruguay, potable water services—privatized during the neoliberal period—were set to return to the public sphere in the mid-2000s. This was a promising scenario as it entailed a wide scope for development. However, over a decade after this process was set in motion, the results are discouraging. The new problems in public water management have to do with outsourcing key areas and covert privatization processes. Furthermore, rate reforms transferred the problems created in natural water basins to mass users, which implies a form of water privatization as the entire society subsidizes the environmental costs of pollution (Ribeiro, 2006).There is a wide variety of gray areas between the public management model, where service provision is a common good and a state responsibility, and the private management model, where the service becomes a commodity.This paper analyzes the restatization and public management of drinking water services in Uruguay according to a state logic and its inertias in the transition from neoliberal to progressive administrations. Institutional inertia is critical in these experiences because it renders services the joint and complex result of combining a state logic and a privatization logic, where public oversight and community participation are mentioned by some government authorities but excluded in practice. This is what Gautreau and Perrier have called neoliberal resilience (2019). These logics intertwine perversely in key management areas, such as rate structures.