Private Means Better? A Water and Sanitation Quasi-Experimental Design

27 Pages Posted: 17 Sep 2021 Last revised: 21 Sep 2021

See all articles by Arthur Dassan

Arthur Dassan

Getulio Vargas Foundation (FGV) - Sao Paulo School of Economics

Joelson Oliveira Sampaio

Getulio Vargas Foundation (FGV) - Sao Paulo School of Economics

Vinicius Brunassi Silva

Fundação Escola de Comércio Álvares Penteado (FECAP)

Rodrigo De-Losso

University of São Paulo (USP) - Department of Economics

Date Written: August 17, 2021

Abstract

This paper compares water and sanitation services in municipalities that entered into a concession arrangement with a private operator versus those in a comparable control group of municipalities that continued with a public operator, and we explore five variables of interest: (i) water coverage; (ii) sewage collection; (iii) sewage treatment; (iv) average tariff; and (v) water losses. Using an empirical strategy and making improvements over previous literature, after controlling for municipality peculiarities, we adopt a difference-in-differences model with nearest neighbor matching (NNM) to evaluate private sector management impacts on these variables. We find a greater tariff increase in the first four years after a private operator's start after concession. We only identify weak evidence of greater sewage treatment increase in municipalities that change to a private operator and find no relevant or significant results for the other variables. In terms of policy, this paper contributes with the government clarifying the main benefits of privatizing water and sanitation services.

Keywords: Water and Sanitation; Private sector management; Treatment Effect.

JEL Classification: O18, H54, L95, Q53

Suggested Citation

Dassan, Arthur and Sampaio, Joelson Oliveira and Brunassi Silva, Vinicius Augusto and De-Losso, Rodrigo, Private Means Better? A Water and Sanitation Quasi-Experimental Design (August 17, 2021). Available at SSRN: https://ssrn.com/abstract=3906641 or http://dx.doi.org/10.2139/ssrn.3906641

Arthur Dassan

Getulio Vargas Foundation (FGV) - Sao Paulo School of Economics ( email )

Brazil

Joelson Oliveira Sampaio (Contact Author)

Getulio Vargas Foundation (FGV) - Sao Paulo School of Economics ( email )

Brazil

HOME PAGE: http://eesp.fgv.br/

Vinicius Augusto Brunassi Silva

Fundação Escola de Comércio Álvares Penteado (FECAP) ( email )

Av. Liberdade, 532
Liberdade
São Paulo, SP 01502-001
Brazil
+551199518-5913 (Phone)

Rodrigo De-Losso

University of São Paulo (USP) - Department of Economics ( email )

Av. Prof. Luciano Gualberto 908
Sao Paulo SP, 05508-010
Brazil
551130930957 (Phone)

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