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A comparative institutional analysis of public and private operations in the urban water sector

A comparative institutional analysis of public and private operations in the urban water sector

Lobina, Emanuele ORCID: 0000-0003-4774-0308 (2015) A comparative institutional analysis of public and private operations in the urban water sector. PhD thesis, University of Greenwich.

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Abstract

This PhD by published work comprises nine papers published between 2000 and 2013 and a case for support. The research focuses upon the comparative institutional analysis of public and private operations of urban water supply and sanitation services in developed, transition and developing countries. This topic is of scholarly relevance because the debate on the relative efficiency of public and private water operations remains unresolved. The research objectives are to evaluate theoretical expectations of private sector efficiency and public sector inefficiency, and identify the fundamental causal mechanism of the relative efficiency of public and private operations in the urban water sector.

In the aim of contributing to a critical realist theory of the firm, the review of extant theory is situated within the metatheoretical debate between orthodox and heterodox economic theory. To support the investigation of the duality of agency and institutions, a composite analytical framework is devised by integrating the Williamsonian tradition of comparative institutional analysis with the policy networks tradition, and adapted to reflect the characteristics of transactions in the urban water sector. Evidence is derived from a unique body of qualitative case studies produced in 14 years of empirical research, and looking at the relative efficiency of public and private water operations in developed, transition and developing countries. Interpreting the evidence through the lens of the analytical framework allows for ascertaining the regularities produced by public and private operations in terms of aligned actors’ attitudes, power and institutions.

The thesis makes three main contributions. First, mainstream expectations of superior private sector efficiency in the urban water sector do not hold. This is due to the alignment of the profit maximisation imperative inherent to the private sector, and the formal institutions that reproduce power asymmetries under private sector participation. This alignment results in private water operators appropriating net gains at the expense of the served communities. Second, mainstream expectations of intrinsic public sector inefficiency are unfounded. This is due to the alignment of public water operators’ low-powered incentives to appropriate net gains – incentives resulting from the fact that the profit maximisation imperative does not apply to the public sector, and formal institutions reducing power asymmetries between governance participants. This alignment can and does lead to public sector efficiency. Third, consisting in the alignment of actors’ motivation, actors’ power, and institutions with sustainable development objectives, remediable institutional alignment is the fundamental causal mechanism behind relative efficiency in the urban water sector.

Remediable institutional alignment accounts for the necessity of private inefficiency and the possibility of public efficiency. It thus innovates in relation to extant theories of the firm that predict the necessity of private efficiency and public inefficiency (public choice and property right theory), the possibility of public and private efficiency (Williamson’s comparative institutional analysis), and the necessity of public efficiency and private inefficiency (market failure). Remediable institutional alignment’s predictions suggest that the public sector should be preferred over the private sector to enhance sustainable water development, and that in-house restructuring should be adopted to underpin and secure public sector efficiency.

Item Type: Thesis (PhD)
Uncontrolled Keywords: Water service reform; water governance; Comparative institutional analysis; Oliver Williamson; Critical realism; Remediable institutional alignment; organisational efficiency
Faculty / Department / Research Group: Faculty of Business
Faculty of Business > Centre for Work and Employment Research (CREW)
Faculty of Business > Centre for Work and Employment Research (CREW) > Public Services International Research Unit (PSIRU)
Faculty of Business > Department of International Business & Economics
Related URLs:
Last Modified: 16 Aug 2019 16:01
Selected for GREAT 2016: None
Selected for GREAT 2017: None
Selected for GREAT 2018: None
Selected for GREAT 2019: None
URI: http://gala.gre.ac.uk/id/eprint/24981

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