Remunicipalization in Latin America: Where are we now and where are we going?

Remunicipalization is one model of public service delivery where the local government takes back provision by ending private concession contracts. In the words of Wollman and Bakker (both of whom have used the “swinging pendulum” metaphor), we’re moving from public to private to public again. While the vast majority of the literature on remunicipalizations has focused on European cases, we have reached a point where there are enough instances of Latin American municipalities taking back drinking water supply back into their hands. This paper uses a unique dataset on global remunicipalizations (Kishimoto, Lobina and Petitjean 2015, N=235) and focuses its analysis on Latin American countries. In the paper, I examine the factors that drove remunicipalization of water supply and discern potential causal mechanisms for this de-privatization movement. I argue that, while we have a larger number of cases of remunicipalization, it is hard to discern if there is enough data for a generalizable enough theory of water supply de-privatization. In light of this insight, I propose a research agenda on the potential effectiveness of remunicipalization as a strategy to strengthen local water utilities, bring the public back in and provide more democratic engagement in water policy in Latin America.

Transcript

1. Remunicipalization in Latin America:
   Where are we now and where are we
   going?
   RAUL PACHECO-VEGA
   CENTRO DE INVESTIGACIÓN Y DOCENCIA ECONÓMICAS (CIDE)
   LATIN AMERICAN STUDIES ASSOCIATION (LASA) 2016
   NEW YORK CITY, NY, USA, MAY 29TH, 2016
   

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2. Why remunicipalization?
    Municipalities are responsible for domestic water provision
    “With great power, comes great responsibility” (Ben Parker in
   Spiderman)
    Financial commitments by federal government non visible. Why?
    Strong push by transnational corporations (Veolia, Suez
   Environnement) towards privatized water supply.
   
    But many municipal governments are fighting back and reclaiming
   their water (>200 cases worldwide, 1 in Mexico)
    MacDonald (2012), Kishimoto et al (2015)
   

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3. 0
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   10
   12
   1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
   Total number of public protests against private sector water supply per year (Source: Constructed from a dataset
   based on Bakker 2010). N=56 cases of protests, M=38 countries. Average number of protests 3.1 protests per year.
   Zeroes in the dataset do not necessarily imply lack of protest activity.
   

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4. 0
   1
   2
   3
   4
   5
   6
   7
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   Total number of public protests against private sector water supply per year (Source: Constructed from a
   dataset based on Bakker 2010). N=56 cases of protests, M=38 countries.
   

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5. View Slide

6. 5 countervailing forces
    1) increased push by international institutions and government agencies towards
   privatizing water supply;
    2) continued weakening of municipalities’ financial health through poor intergovernmental
   cash transfers and low application of fiscal federalism;
    3) lack of a systematic approach to identification of potential implementation strategies
   for a human right to water;
    4) strong private interests in the global business of drinking water, whose vested interests in
   water marketization and commodification pervade any other discussion and
    5) disconnect between domestic discussions of human rights, constitutional environmental
   rights and the human right to water.
   

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7. 3 reasons why remunicipalization is
   challenging
   1) Municipal governments may fear retaliation from private companies (in the form
   of lawsuits)
   2) Municipal governents may be bound by hard-hitting, draconian contracts that
   make it practically and financially unfeasible to break the contract and rescind
   concession agreements.
   3) Municipal governments may not have enough capital, human resources,
   infrastructure or capacity to actually provide water supply services in the absence
   of the private agent.
   

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8. Berlin Paris Grenoble Hamilton Atlanta Buenos Aires
   Increased
   societal
   pushback
   against
   privatizing
   water supply
   Very strong Very strong Very strong Somewhat visible,
   but mostly
   complaints about
   water service
   delivery
   Not so visible Visible, but not a
   major driving force
   Strengthening of
   municipalities’
   financial health
   Relative
   (purchased back)
   Strong, in spite
   of major player
   present
   Somewhat
   weaker
   Yes (PUMC
   showed inability
   to provide service)
   Yes (it was
   cheaper for
   Atlanta to offer
   public water
   supply)
   Yes, it was clear that
   the system was not
   able to provide the
   service
   Explicit
   implementation
   strategies for a
   human right to
   water
   More explicit via
   social
   mobilization
   No No No Not explicit No
   Source: Own analysis based on secondary sources
   

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9. Ramos Arizpe (Coahuila, Mexico)
   • Mayor ran on a remunicipalization platform for his mayoral campaign, and did
   good on his remunicipalization promise. So far, no other Mexican mayor has ran
   on a political platform overtly establishing policies against water privatization.
   - Remunicipalization actually worked. Ramos Arizpe was able to get out of a
   concession contract by terminating its relationship with Aguas de Ramos Arizpe
   (AGRA).
   - Civil society played an instrumental role in how remunicipalization processes
   played out by providing increased pressure.
   

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10. Berlin Paris Grenoble Hamilton Atlanta Buenos Aires
    Absence of
    strong private
    interests in the
    global business
    of drinking
    water
    Left the
    process after
    contract
    ended
    Main players
    Veolia and
    Suez are
    located there
    Veolia and Suez
    participated in
    privatization
    PUMC was a
    large company
    but not global
    enough
    United was a local
    company, but
    could have been a
    global one
    Privatization didn’t
    appear to be driven by
    strong global interests,
    but lack of interest on
    the part of local supplier
    in offering the service
    Linkages
    between
    domestic
    discussions of
    human rights,
    constitutional
    environmental
    rights and the
    human right to
    water
    More explicit
    through
    environment
    al NGOs, but
    no discussion
    of
    constitutional
    rights.
    Not visible Not explicitly Not visible in
    this particular
    case
    Not explicit in the
    conversation, more
    about fiscal health
    and general
    incompetency by
    the private
    company
    Not explicit, more
    concern for lack of
    efficiency at the local
    and provincial levels
    Source: Own analysis based on secondary sources
    

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11. Conclusions
     I argue that remunicipalization could serve as a model of policy implementation of
    the human right to water if the 5 challenges outlined can be tackled satisfactorily.
     I also argue that properly implementing the human right to water would mean the
    disappearance of water as a commodity, and effectively the closure of bottling
    plants throughout the world.
     Given the current stronghold that bottling water companies and transnational
    water consortia have on domestic and global water markets, I seriously doubt that
    we will be able to implement the human right to water as stated in international
    treaties and domestic implementations.
    
    

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12. Thank you!
     Dr. Raul Pacheco-Vega
    CIDE
    http://www.raulpacheco.org
    Twitter: http://www.twitter.com/raulpacheco
    Facebook: http://www.facebook.com/DrPachecoVega
    raul.pacheco-vega@cide.edu
    

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