GOVERNABILITY AND SUSTAINABLE DEVELOPMENT OF WATER AND SEWERAGE SERVICES IN LATIN AMERICA-A COMPARATIVE ANALYSIS OF THE PRIVATIZATION PROCESS IN CHILE AND BUENOS AIRES – ARGENTINA

For the last 30 years, water and sewerage services (W&S) provision in Latin America’s urban areas has experienced successive reform, in an effort to improve its performance. Among them it should be mentioned the reform occurred in the ’90 in several countries of the region, based on private sector participation on W&S provision management. Despite all the attempts done, nowadays most of Latin America countries (LACs) are far from reaching universal service goals, with important deficits in service quality and environmental sustainability. The objective of the present research is to identify and analyze factors that have gravitated on the development of W&S provision in LA urban areas, using W&S provision experience in Argentina (specifically the provision in Metropolitan Area of Buenos Aires-MABA) and Chile as a benchmark for the rest of the LACs. Both cases are considered emblematic due to the changes in the institutional and industrial sector’s organization during the ’90, where intense privatization processes took place. However, Chile and MABA have had contrasting characteristics and results. The article describes and analyzes different stages in the development of the provision during the last decades, stressing the importance of the macroeconomic, legal and institutional context, and the way endogenous and exogenous factors constrain and procure the results achieved.These experiences allow one to draw lessons to be taken into account in reforming processes for improving the governability and sustainable development of water and sewerage services in Latin America: sectoral policies, legal framework, institutional organization, private participation process, regulation practices, financing estructure, subsidy mechanisms, pro-poor policies, transparency and corruption control and restriction to extraordinary guarantees conceded to private companies.