22 increases returns to new owners and shareholders, with more robust findings in high and middle income countries than in low income countries.

45. In infrastructure sectors the evidence is more mixed: recent reviews show that private participation yields benefits when accompanied by proper policy and regulatory frameworks (Estache 2004, Harris 2004). Efficiency gains tend to be concentrated in certain regions (Latin America, East Asia) and sectors (telecoms and electricity). The gains also tend to be concentrated in urban rather than rural areas; urban areas for example constitute less than 30 percent of the populace in low and middle income countries and have access rates at about 70 percent higher than their rural counterparts (Briceño-Garmendia et al 2005). In general the gains have been harder to achieve and sustain in low-income, institutionally weak countries and in sectors such as water where the social implications of tariff adjustment make private participation more of a challenge.

46. Contract renegotiations are frequent. In Latin America, for example, half of all infrastructure concession contracts have been renegotiated, with transport and water having the highest rates (Guasch 2004). Renegotiations are not always bad, and some may be required to deal with poorly designed contracts, but cancellation or distress as a result of failed renegotiations is on the rise, totaling 140 or 9.7 percent of all infrastructure projects by the end of 2003 (Izaguirre 2004). Water and sewerage sectors have been most affected; in Buenos Aires and Manila, for example, water concessions encountered difficulties when devaluations led to large tariff increases that were politically difficult to implement. In sub-Saharan Africa, difficulties in negotiating and enforcing credible contracts have led concessions in the water to come under stress, and in some cases (e.g. Uganda, Mozambique) to be terminated.

47. Compared to the large number of privatization transactions there have been few instances of outright reversal or re-nationalization. Those that have taken place usually occurred when very large heavily indebted privatized firms failed, or in times of crisis and/or political change. Among the prominent examples: Rail Track in the UK (as a result of bankruptcy), Air New Zealand (a $300 million rescue package), La Paz and El Alto water concessions in Bolivia, and banks in Chile and Mexico that had been poorly privatized in the first rounds with protection from foreign competition, then renationalized, and subsequently reprivatized.

48. Though relatively few in number these and other recent transactions under stress have contributed to declining public support, worldwide, for privatization. Recent public opinion polls show the following:

- In Latin America, about 75 percent of the population in 1995 supported privatization (Estache 2004), but a more recent Latinobarómetro poll found that between 1998 and 2002 the percentage of people who say that the state should leave productive activity in private hands fell from 51 to 35 percent.  During the same period the percentage of those who believed that privatization has been beneficial for their country fell from 46 to 28 percent (Figure 12).  And when asked specifically whether the state or the private sector should be responsible for service delivery in the water and power sectors, 70 percent of respondents wanted the state to take charge;