京都大学 大学院経済学研究科・経済学部

(Title)
"Taking Back Control of Urban Water Delivery: The Effect of Remunicipalization on Prices and Consumption"　Germà Bel

Abstract:
Governments across the world are contemplating taking back direct control of privatized public services. Among other reasons for remunicipalization, promoters have placed special emphasis on higher prices and less commitment to environmental objectives under private management. We estimate the causal effect of remunicipalization of urban water on water prices and consumption in a difference-in-differences framework. We find that consumption is unaffected, but there is evidence that remunicipalization leads to price reductions of about 2 to 5 cents per cubic meter in larger municipalities. If Terrassa is excluded, a case of extreme price increases a few years after remunicipalization, the decrease in prices is between 3 and 7 cents regardless of the size of the municipality. Since remunicipalization typically happens when a contract with a private firm expires, we investigate whether the threat of competition arising from expiring contracts itself also leads to price reductions. After contract expiry without remunicipalization, water prices decline by 2 to 4 cents per cubic meter. Thus, both remunicipalization and competition for incumbents appear to reduce water prices, but the effect is somewhat greater for remunicipalization.