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A better future for water: what role for theory?

A better future for water: what role for theory?

Lobina, Emanuele ORCID: 0000-0003-4774-0308 (2017) A better future for water: what role for theory? ISRF Bulletin (XIII). pp. 16-21.

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While government failure and market failure theories respectively predict the necessity of private and public efficiency, both fail to predict the public and private inefficiencies which are empirically pervasive. This failure of prediction is due to deductive reasoning that insulates explanatory claims from the real-world duality of agency and institutions. Oliver Williamson lays the foundations for recognising organisational failures of all kinds, by acknowledging this duality, but remains hamstrung by the limits of deductive reasoning.

To resolve this impasse, this project develops a theory of organisational failure that illuminates the multiplicity of the possible organisational efficiency outcomes, explaining how public and private water utilities become more or less efficient under varying circumstances, and reveals the social and economic factors leading to these outcomes. It does so by revisiting Williamson’s comparative institutional analysis from a critical realist vantage point, using inductive reasoning as a method of theorising, adopting multiple rationality as agency model and the duality of agency and institutions as the key to explanation.

The theory is developed through a new “remediable institutional alignment” framework, which operationalises the duality of agency and institutions by exploring the interplay of actors’ motivation, power, organisational arrangements and institutional environments. This framework is used to analyse the evidence from 30 qualitative case studies produced in 15 years of research on water service reform. Each case illustrates how path-dependency causes the temporary lock-in of organisational efficiency. The cases are then compared to formulate hypotheses on the causality of variations in relative efficiency. Throughout this process, inputs from industrial organisation, economic sociology, and political and policy sciences contribute to the emergence of socialised, historical and non-reductionist accounts of relative efficiency. The enhanced explanatory power of this theory promises to better support organisational reform and serve social justice in a sector vital to social and economic development.

Item Type: Article
Uncontrolled Keywords: Industrial organisation; critical realism; rational choice; comparative institutional analysis;organisational failure; market failure; government failure; relative efficiency; applied economics; economic sociology; policy sciences; agency; institutions;path-dependency; urban water services; public sector reform; policy making; decision making.
Faculty / School / Research Centre / Research Group: Faculty of Business
Faculty of Business > Department of International Business & Economics
Faculty of Business > Centre for Work and Employment Research (CREW) > Public Services International Research Unit (PSIRU)
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Last Modified: 17 Mar 2019 17:00

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