Managing Public Water Utilities: an assessment of bureaucratic and New Public Management models in the water supply and sanitation sectors in low- and middle-income countries

Despite strong encouragement of many international financing and development agencies to stimulate private sector involvement in the water supply and sanitation sector, the overwhelming majority of water supply and sanitation services are still provided by public sector organizations in most middle- and low-income countries. In many low and middle-income countries, however, public water utilities are not providing adequate water supply and sanitation services to its consumers. The consequences of poor service provision in terms of health and financial costs to especially the low-income households are enormous. At the same time, the disappointing experiences with private sector involvement in the water supply and sanitation sector have lead to the acknowledgement that the overwhelming majority of people will continue to be serviced by public water utilities for many years to come. In response to the poor performance of many public water utilities, the implementation of New Public Management (NPM) reforms has been promoted heavily by international agencies and sector professionals. The New Public Management, which has its roots in Managerialism and Public Choice theory, originated in New Zealand and the United Kingdom in the early 1980s. Since then, it has become something of a generic term to describe a market-oriented and output-based management model with an increased emphasis on user-orientation, most-commonly by ‘business’ style measures. Although the actual effectiveness of NPM reforms for developing countries has been questioned and empirical evidence for the impact of the New Public Management in the water supply and sanitation sector remains rather thin, a considerable number of authors contend that it is proving to have a significant impact on improving service provision of public water utilities. The present study examines the potential of reforms associated with the New Public Management and contrasts these reforms with reforms associated with the bureaucratic model of public administration, the so-called Weberian reforms. The main research questions that underlie this thesis are: • Do urban public water utilities in low- and middle-income countries perform better because they adhere to the New Public Management? • Do poorly performing urban public water utilities adhere to the traditional ‘bureaucratic’ model of public management?

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