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Lessons from Argentina

This paper presents the findings of a study of the private water and sanitation concession in Buenos Aires, Argentina, one of the largest water concessions in the world and one that has been hailed as a success story internationally. Although there have been some positive developments in terms of investments in infrastructure and the extension of services since 1993 there have been some major failures as well. While some of these failures are unique to Buenos Aires and the politics of Argentina, they do raise some more general questions around the role of the private sector in the delivery of municipal services, and challenge some of the widely held arguments in favour of privatization. One of the core arguments made in favour of privatizing municipal services is that it generates better public accountability. Rather than becoming more accountable to the public, Aguas Argentinas appears to have entrenched a process of secretive and questionable negotiating practices and has made virtually no effort to open itself, and its long-term plans, to public scrutiny. A second argument made in favour of privatization is that private companies are more efficient than the public sector, thereby reducing costs to the end user and freeing up resources for the state that can be used for other development needs. Once again the water concession in Buenos Aires appears to have done the opposite. It would appear that the private water concession in Buenos Aires has done little that a rejuvenated public sector provider could not have done, and has in fact exacerbated some of the worst socio-economic and environmental problems of the city. Poor residents, meanwhile, have been unable to voice their concerns due to the lack of participatory mechanisms and have taken to expressing their grievances through civil disobedience.
Alex Loftus and David A. McDonald
Publication Information: 
MSP Occasional Paper No.2
Publication Date: 
Publication Type: 
Occasional Paper