page_title: Water privatization in the United States
section_title: Impact of private sector participation
hierarchical_section_title: Water privatization in the United States / Impact of private sector participation
caption_attribution_description: A work crew digs to replace a water line in the street in Santa Clara, California.
context_page_description: In the latter half of the 19th century, private water systems began to be a part of municipal services. As of 2011, over three quarters of US local governments surveyed by the ICMA provide water distribution entirely
  with public employees. Over two thirds of municipalities provide water treatment publicly, and over half provide sewage collection and treatment publicly. These rates have remained relatively stable over time.
  The increased interest in privatizing public water services is an outgrowth of political forces and public policies favoring privatization of public services generally, and water resources specifically. A growing number of contracts to privatize public water services is an indicator that privatization has become increasingly attractive to many public water institutions. State legal authority for public entities to privatize water systems has aided the privatization trend. States have enacted statutes authorizing municipalities and other public entities to enter into contracts with private entities to supply water to the public.
  Water corporations have identified United States public systems as potentially profitable.
context_section_description: In 2004 The University of Michigan's Center for Local, State, and Urban Policy published a policy report  regarding privatization, the pros and cons, and its impact on local and state government in the United States. A summary of their conclusions follows:
  Private providers may or may not be more efficient than public providers.  Whether privatization leads to greater cost savings depends largely on whether there is competition in service provision.
  The quality of privatized services may or may not be higher than publicly provided services.  Governments can play an important quality assurance role by monitoring and evaluating the delivery of privatized services.
  In developing and transitional economies, privatization may reduce access to goods and services, particularly for low-income groups.  Comparable studies need to be conducted to assess the distributional consequences of privatization programs in the United States.
  Privatization might lead to more rational labor market policies. However, the employment effects of privatization are more nuanced than commonly assumed by either proponents or opponents of privatization.  Privatization tends to lead to substitution of high-skill for low-skill workers and reduction in total employment levels, but no change in net wages.
  Political considerations strongly influence both if and how policymakers contract-out services to private providers.
  "While many states and localities are turning to privatization as a way to provide services to their citizens, surprisingly little is known about these choices.  Much of the debate over privatization pays little attention to the rationales and consequences of private versus public service provision."
caption: Work crew digs water line
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