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Bellettini, Orazio J., Paul Carrillo, Wladymir Brborich, Mildred Warner, Laura Timme, Elizabeth Coombs. August 2006. "Stay Public or Go Private: A Comparative Analysis of Water Services Between Quito and Guayaquil," Grupo FARO – Fundación para el Avance de las Reformas y las Oportunidades, for Inter-American Development Bank.

Many Latin American countries face similar water problems: deteriorating systems and networks, lack of access to water and sewage for many of the populations’ poorest and governments without the resources or expertise to invest in change. Unfortunately, there is little consensus on how to improve. Many countries, including Ecuador, have embarked on various forms of privatization to increase investment in infrastructure and improve service provision and water quality. In light of contradictory evidence on effects of privatization, we look at water providers in two cities in Ecuador, Guayaquil which privatized and Quito which implemented reforms but maintained public delivery.  In this study, we measure several indicators of water coverage, quality, and prices in both cities, both before and after privatization of water services in Guayaquil. We then compare changes in these indicators (before and after privatization) between the two cities to establish an association between differences and the privatization of water services. Our data allow us to control for income and, thus, evaluate how these indicators have changed, particularly, among the poor.

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Subject: Privatization