The privatisation debate on water services in the Netherlands: public performance of the water sector and the implications of market forces

Legally adopted in France and the UK, privatization of water services is still vigorously debated in the Netherlands. Advocates of privatization believe it is the best way to save on utility costs and to increase their transparency. Opponents believe that the Dutch water sector already provides high quality services for low prices, including an additional public performance that is expected to be excluded in a free market. The author argues that the performance of water service providers should not be assessed only in terms of efficiency, but in terms of the effects on the entire water system as well as the protection of small customers. It is quite possible that without privatization, a public agency could also improve its efficiency and become more competitive in relation to other service providers. Privatization seems to be more a matter of political ideology (based on a belief that the public sector operates inefficiently) than a matter of hard facts. The success of privatization depends at least on the performance of a complementary public regulatory regime. The question should not be whether the public or the private sector performs better hypothetically, but how the actual performance regarding public goods and services can be improved.