Alberto Ruiz-Villaverde, Francisco González-Gómez, Andrés J. Picazo- Tadeo

The privatisation of urban water services: theory and empirical evidence in the case of Spain

Following the wave of deregulation and privatisation of public firms that started in Anglo-Saxon economies in the late 1970s, most industrialised countries changed their laws to encourage the contracting out of local services. Accordingly, in 1985 many Spanish municipalities began to privatise their urban water services. However, three decades after the first privatisations took place, and against a backdrop of increasing opposition to new privatisations, several municipalities are now returning to the public provision of these services. In this context, after establishing a theoretical framework for privatisation, this paper goes on to describe the main features of the process of privatisation of urban water services in Spain, as well as recent trends towards remunicipalisation. With no clear empirical evidence as to whether public or private management of urban water services is better, this ongoing debate is set to continue and will be strongly influenced by prevailing ideological trends as well as other environmental factors.

Keywords: Urban water services; privatisation; remunicipalisation; Spain

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