Modes of Engagement with the Public Sector

The objective of this World Bank-sponsored project is to analyse well-functioning models of public sector service provision. From this analysis, lessons from best practice examples will be identified, and based on those lessons a public sector reform agenda for the water sector will be proposed.

The overwhelming majority of formal water and sanitation services are provided by the public sector and are likely to remain in the public sector for decades to come.

In many countries, however, public service providers have failed to provide consumers with adequate services. Often stated problems that have led to poor service provision include overstaffing, low cost-recovery, and poor governance.

In order to address the problems faced by many public utilities alternative approaches for sector reform must be developed to facilitate improved service delivery by public agencies.

These alternative approaches can be developed by analyzing the functioning of public utilities that have shown good performance over a long period of time or have dramatically improved performance in recent years.

Overview of activities

Project work is undertaken in four phases:

• August 2002 - May 2003: International review and characterization of well functioning public sector utilities.
• May 2003-December 2003: Detailed assessment and analysis of well-functioning public sector service providers in 11 countries.
• January 2004 - May 2004: Development of viable policy options for public sector reform in developing countries through desk work and two consultative workshops.
• May 2004 - December 2004: Dissemination of results.

The Analytical Framework

The analytical framework used for analyzing the case studies focuses on the core ideas of the so-called New Public Management (NPM). The main assumption behind NPM is that by mimicking the practices of "private sector" organizations, public sector organizations would accrue the benefits of efficiency, flexibility and consumer orientation that are often associated with private sector organizations. In general, New Public Management incorporates four basic ideas:

• Market-orientation (making greater use of markets and the introduction of market-style incentives);
• Customer orientation (or client focus);
• Decentralization of authority to and within the service provider (reducing the burden of hierarchical rules and fostering greater discretion at lower points in the hierarchy); and
• Accountability for results both within the utility as well as externally.

As these core ideas operate at different levels, both externally and internally to the utility, the analytical framework will consist of a two-step approach for analyzing well-functioning utilities.

The first step concerns analyzing the relationship between the utility and the (institutional) environment in which the utility operates. The second step concerns analyzing the internal functioning of the utility.

The Case Studies

The following case studies will be undertaken as part of this project:

1. Public Utilities Board, Singapore
2. Haiphong Water Company, Vietnam
3. Scottish Water, Scotland
4. National Water and Sewerage Corporation, Uganda
5. Johannesburg Water, South Africa
6. SANASA Campinas, Brazil
7. SONEDE, Tunisia
8. Seattle Public Utilities, United States
9. AQUA S.A. Bielsko-Biala, Poland
10. ONEA, Burkina Faso
11. Group Case Study: 5 case studies in the State of Guanajuato, Mexico