OWNERSHIP AND SOURCES OF INEFFICIENCY IN THE PROVISION OF WATER SERVICES

The relative efficiency of service provision by publicly versus privat ely owned enterprises has been the subject of considerable theoretical debate and empirical investigation for at least the last hundred year s. This research investigates the relative efficiencies of publicly ve rsus privately owned water utilities. The publicly owned enterprises a re found to be more efficient overall, as well as in the technical eff iciency associated with the employment of labor, capital, energy, and material inputs. No significant differences are found in scale efficie ncies between the two classes of enterprise. The greatest level of ine fficiency results from the overuse of capital relative to the most eff icient firms in the sample, while discrepancies in labor use was the l east among the four inputs considered.