Honors Theses

Date of Award

2008

Document Type

Undergraduate Thesis

Department

Croft Institute for International Studies

First Advisor

Oliver Dinius

Relational Format

Dissertation/Thesis

Abstract

In 1993, the water providing service of Buenos Aires was privatized in order to increase the number of constituents with water access and improve water quality. The government also needed an infusion of cash to pay off foreign debt and support a new monetary policy pegged to the dollar. Given these two situations, privatization seemed to provide the most logical answer to each of these problems. However, after ten years of water rate increases that prohibited many citizens fi*om receiving water access, the state renationalized water service in Buenos Aires, Although privatization is generally accepted as the most efficient means of running an organization, this economic policy failed in Buenos Aires. The government did not have enough regulatory powers to insure that the water service contract was followed. The foreign-run water service was able to break its contract, charge extremely high rates, and keep its contract, privatization does not always provide the best solution to a problem. It depends on the level of development and regulation that exists within a society. If there is not a sufficiently developed system of regulation, then privatization cannot have success.

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