Unholy Water

by on August 18, 2006 at 7:12 am in Economics, Education, Food and Drink, Religion | Permalink

The EclecticEconomist alerts us to a story in the Onion CBC News:

The United Church of Canada may ask its members to stop buying bottled water.

The
request is part of a resolution against the privatization of water
supplies that has been put before delegates at the church’s general
council this week in Thunder Bay….

"We’re against the commodification, the privatization is another way to say it, of water anyway, anywhere," [said a church leader.]

If the United Church cares about children they should reconsider their opposition.  Privatized water saves lives.  From my post, Water of Life:

…In the 1990s Argentina embarked
on one of the largest privatization campaigns in the world, including
the privatization of local water
companies covering approximately 30 percent of the country’s
municipalities.
Using the variation in ownership of water provision across time and
space generated
by the privatization process, we find that child mortality fell 8
percent in
the areas that privatized their water services and that the effect was
largest (26 percent) in the poorest areas….

That is the abstract to a very important paper, Water for Life: The Impact of the Privatization of Water Services on Child Mortality, by Sebastian Galiani, Paul Gertler and Ernesto Schargrodsky in the February 2005 issue of the JPE.  (free working paper version).

Dave August 18, 2006 at 8:10 am

Not only does privatized water save lives, but water represents an opportunity to create wealth. See T. Boone Pickens et al and water rights in Western Texas.

Radford Neal August 18, 2006 at 11:29 am

Regarding the comment by Paul Gowder…

Seven people died in Walkerton, Ontario, Canada a few years ago
from e-coli contamination of its government-run water supply.
About the only organization who performed well in this tragedy
was the private company who tested the water. They did their job,
and went beyond it by sending a fax alterting the water system
operators of the problem early when preliminary results were bad.
The operators, who were local government employees, were both
incompetent and dishonest. The provincial government was negligent
in not supervising the local utility properly.

Now guess who got blamed, in the public eye? The private company
of course. (Though the judicial inquiry did not agree.)

Alex Tabarrok August 18, 2006 at 11:36 am

Paul, you did not read the post very carefully. The United Church is against the privatization of water “anyway, anywhere.” They are not making an economic claim but an absurd ethical claim.

In contrast, if you follow the link to my original post, I was clear that water privatization may not have benefits everywhere.

As to Canada, well if you were Canadian you would not be so quick to throw off concerns about deaths from water-borne parasites.

http://www.cbc.ca/news/background/walkerton/

Paul Gowder August 18, 2006 at 12:08 pm

Radford: anecodate =/= evidence.

Mike: Argentina is receiving world bank assistance, recently had a catastrophic economic collapse (right after the herculean privatization effort, whoops), and has (per the cia world factbook) 38.5% of its population in poverty. It sounds pretty underdeveloped to me.

Alex: Fair enough. I hadn’t followed the link to your original post. My bad.

However, referencing that story on the Walkerton disaster is a bit ironic. From the story: “[The inquiry] found that illnesses could have been prevented if Koebel had monitored chlorine levels in the drinking water. It also pointed to deregulation of water testing and cuts to the Environment Ministry by the Ontario government as contributing factors.”

Dylan August 18, 2006 at 12:20 pm

“Argentina is receiving world bank assistance, recently had a catastrophic economic collapse (right after the herculean privatization effort, whoops), and has (per the cia world factbook) 38.5% of its population in poverty. It sounds pretty underdeveloped to me.”

I suppose Germany in the 30′s was also underdeveloped. That would explain why they weren’t able to manufacture any advanced weapons.

Paul Gowder August 18, 2006 at 12:58 pm

Dylan: the issue isn’t overall level of technology, it’s rural infrastructure. A country with a weak rural infrastructure is of course going to have shoddy water service in poor rural areas. I haven’t been able to find much on this from a few searches, but the Inter-American Development Bank seems to think that “Argentina has some serious physical infrastructure gaps, the result of years of scanty investment and maintenance.” + “Studies on the provinces show development gaps in some parts of the country, particularly rural areas.” For what it’s worth.

anon August 18, 2006 at 4:30 pm

Water supply is a natural monopoly. What’s absurd about the position that privatizing it is likely to decrease net welfare unless the monopoly is regulated?

Paul Gowder August 19, 2006 at 12:23 am

It’s ironic because the failures were caused at least in part by the policies that libertarian-types love to advocate as the intentional slippery slope toward privatization (drowning the government in a bathtub and all that) — to wit: deregulation and underfunding public services. Yes, government services that have been crippled by policies consciously intended to force them to fail will underperform private services. Big shock.

bbartlog August 19, 2006 at 12:13 pm

Surely there are cases where privatizing the water supply amounts to a grant of monopoly where no such previously existed? In such cases there doesn’t seem to be a public benefit. As for T. Boone Pickens and his water company, I don’t think exploiting public land use traditions to precipitate a tragedy of the commons is something to be cheered on; stockholder wealth was created, but more or less just by efficient looting of a public resource (the aquifer).
Those who find anecdotes compelling might also look at Bechtel in Bolivia or water privatization in Tamil Nadu – I don’t think the outcomes are as bad as some make them out to be, but those would probably be examples the left would cherrypick of they wanted to show how corporations could screw things up.

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