Publication:
Reforming the Urban Water System in Santiago, Chile

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dc.contributor.authorShirley, Mary M.
dc.contributor.authorXu, L. Colin
dc.contributor.authorZuluaga, Ana Maria
dc.date.accessioned2015-07-28T18:30:00Z
dc.date.available2015-07-28T18:30:00Z
dc.date.issued2000-03
dc.description.abstractIn the late 1980s, Chile planned to privatize Santiago's sanitary works enterprise (EMOS) but instead reformed it under public ownership. It did so through a regulatory framework that mimicked the design of a concession with a private utility, setting tariffs that ensured at least a seven percent return on assets, creating a neutral regulator independent of ministry intervention, and giving EMOS the right to appeal the regulator's tariff decisions. This reform of Santiago's water system is often cited as a case of successful reform under public management. Comparing a comprehensive measure of welfare with a counterfactual example, the authors show surprisingly large gains from Santiago's reform, given the relatively good initial conditions. (The gains accrued largely to government and employees, but consumers benefited from improved service and coverage). Why did reform in Santiago improve water system performance, when similar reform attempts under public management in other countries failed? 1) Chile has a long tradition of private water rights, shaped by early recognition that water is a scarce and tradable private good. 2) The reformed regulatory framework was designed to attract private investors to the water system and to motivate them to operate efficiently and expand the system. 3) Chile's unique electoral institutions sustained this framework under state operation after democracy was restored. 4) Chile's strong bureaucratic norms and institutions (permitting little corruption), combined with Santiago's relatively low-cost water system, permitted prices that effectively increased quasi-rents for investing in the system while minimizing the risk of inefficiency or monopoly rents. The authors also address the question of why EMOS was reformed but not privatized, and what the costs of not privatizing were. The system was privatized in 1999, but the changes from privatization are likely to be less significant than those introduced in 1989-90.en
dc.identifierhttp://documents.worldbank.org/curated/en/2000/03/438162/reforming-urban-water-system-santiago-chile
dc.identifier.doi10.1596/1813-9450-2294
dc.identifier.urihttps://hdl.handle.net/10986/22314
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 2294
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectCASH FLOW
dc.subjectCONCESSION AREA
dc.subjectCONSTRUCTION
dc.subjectCONSUMER SURPLUS
dc.subjectCONTAMINATED WATER
dc.subjectCOST RECOVERY
dc.subjectDEBT
dc.subjectDEMAND ESTIMATES
dc.subjectDEMAND FOR WATER
dc.subjectDIVIDENDS
dc.subjectECONOMIC EFFECTS
dc.subjectECONOMIC WELFARE
dc.subjectEXPENDITURES
dc.subjectFIXED COSTS
dc.subjectHIGH LEVELS
dc.subjectHOUSEHOLDS
dc.subjectINCOME
dc.subjectINFLATION
dc.subjectINFORMATION ASYMMETRIES
dc.subjectINSTITUTIONAL CHANGE
dc.subjectINVESTMENT PROGRAM
dc.subjectINVESTMENT REQUIREMENTS
dc.subjectMARGINAL COSTS
dc.subjectMUNICIPAL COMPANIES
dc.subjectMUNICIPAL COMPANY
dc.subjectMUNICIPALITIES
dc.subjectNUMBER OF CONNECTIONS
dc.subjectPIPED WATER
dc.subjectPOPULATION GROWTH
dc.subjectPRICE OF WATER
dc.subjectPRIVATE PROPERTY
dc.subjectPRIVATE UTILITY
dc.subjectPRIVATE WATER RIGHTS
dc.subjectPRODUCTIVITY
dc.subjectPUBLIC MANAGEMENT
dc.subjectPUBLIC OWNERSHIP
dc.subjectPUBLIC WATER
dc.subjectPUBLIC WORKS
dc.subjectRAW WATER
dc.subjectREGULATORY FRAMEWORK
dc.subjectSALE OF WATER
dc.subjectSERVICE QUALITY
dc.subjectSEWAGE TREATMENT
dc.subjectSEWERAGE SERVICES
dc.subjectSNOW MELT
dc.subjectSURFACE WATER
dc.subjectTARIFF DECISIONS
dc.subjectTARIFF SETTING
dc.subjectTARIFF SETTING PROCESS
dc.subjectTRANSACTION COSTS
dc.subjectURBAN WATER
dc.subjectURBAN WATER SUPPLY
dc.subjectURBAN WATER SYSTEM
dc.subjectUTILITIES
dc.subjectVARIABLE COSTS
dc.subjectWAGES
dc.subjectWASTEWATER
dc.subjectWATER COMPANIES
dc.subjectWATER COMPANY
dc.subjectWATER CONNECTIONS
dc.subjectWATER CONSUMPTION
dc.subjectWATER INFRASTRUCTURE
dc.subjectWATER LEGISLATION
dc.subjectWATER MARKET
dc.subjectWATER PRESSURE
dc.subjectWATER REGULATION
dc.subjectWATER RIGHTS
dc.subjectWATER SECTOR
dc.subjectWATER SERVICES
dc.subjectWATER SHORTAGES
dc.subjectWATER SOURCES
dc.subjectWATER SYSTEM
dc.subjectWATER SYSTEMS
dc.subjectWATER TARIFFS
dc.subjectWELFARE GAINS
dc.subjectWELLS
dc.titleReforming the Urban Water System in Santiago, Chileen
dc.typeWorking Paperen
dc.typeDocument de travailfr
dc.typeDocumento de trabajoes
dspace.entity.typePublication
okr.crossref.titleReforming the Urban Water System in Santiago, Chile
okr.date.disclosure2010-07-01
okr.date.doiregistration2025-04-10T10:55:25.034533Z
okr.doctypePublications & Research
okr.doctypePublications & Research::Policy Research Working Paper
okr.docurlhttp://documents.worldbank.org/curated/en/2000/03/438162/reforming-urban-water-system-santiago-chile
okr.globalpracticeWater
okr.guid238281468744045941
okr.identifier.doi10.1596/1813-9450-2294
okr.identifier.externaldocumentum000094946_00031605362475
okr.identifier.internaldocumentum438162
okr.identifier.reportWPS2294
okr.language.supporteden
okr.pdfurl/IB/2000/04/05/000094946_00031605362475/additional/111511323_20041118104412.pdfen
okr.region.administrativeLatin America & Caribbean
okr.region.countryChile
okr.region.geographicalSouth America
okr.sectorPrivate Sector Development
okr.sectorWater, sanitation and flood protection
okr.topicWater Supply and Sanitation::Water Supply and Systems
okr.topicWater Supply and Sanitation::Town Water Supply and Sanitation
okr.topicPublic Sector Development::Decentralization
okr.topicWater Resources::Water Conservation
okr.topicWater Supply and Sanitation::Water Supply and Sanitation Governance and Institutions
okr.topicWater Resources::Water and Industry
okr.topicEnvironment::Environmental Economics & Policies
okr.unitRegulation and Competition Policy, Development Research Group
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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