14 juli 2005

Private water: no disaster, nor panacea (The Flemish Waterdrinker)

Private water tastes as good, is as healthy and probably less dear than public water, this study reports. There is as much regulatory compliance with privately owned utilities as with publicly owned, and household expenditures on water are less when water comes through the pipes of private companies. Despite pervasive market failures, nothing suggests that this necessarily means that only publicly owned companies can deliver the goods (or, in this case, liquids). But because their is no real competition - only limited benchmark or yardstick competition - there is neither much difference between private and public. A lot also probably depends on government regulation and oversight which can be more efficiënt when companies are owned by the private sector. From where then all the horror stories of children dying of contaminated private water? From our lazy media. When publicly owned most journalists are probably left-wing and naturally disposed against privatizaion. When privately owned the media report those stories becauce they sell: good news is no news. So not much difference here either. Nevertheless, many water systems are allready privately owned, and they work rather well, thank you. Perhaps surprisingly the most innovative country here is not free market crazed America, but statist France, which relies heavily on the private sector. It makes me wonder: why is it that those French are horrified by Google, while at the same time they see no problem with privatizing roads and water? I guess it’s because they have nothing against the private sector as such. Their problem is with the market and with competition. I don’t doubt they would not really have a problem with a private railroad, as long as there are no competitors, especially foreign ones. Too bad actually, because even limited benchmark competition as in the water sector can have positive effects, this and other studies show. Imagine then what real competition can do. It’s like with the Bolkestein directive. Evidence suggest that France will profit from opening up it’s services. Mais c’est l’horreur economique, n’est pas?

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