Abstract
A growing body of empirical evidence fails to support rational choice expectations of superior private sector efficiency in the urban water sector. Drawing on Oliver Williamson’s work on comparative institutional analysis, I suggest that institutional adaptability explains the efficiency and effectiveness of the public sector relative to the private sector. Under private sector participation, lowly remediable institutional adaptability favours the deployment of asymmetric power and the production of outcomes unaligned to reform objectives. Conversely, institutions supporting public operations are designed to facilitate the achievement of collective goals. This makes the alignment of individual attitudes, resources and institutions under in-house service provision less resilient to sustainability-oriented change. Remediable institutional alignment undergirds the comparative advantage of public water operations, as more ample opportunities are provided for compliance, allocative efficiency and adaptive performance. I thus call for a critical realist account of the outcomes of water service reform, free of rational choice dogma.
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