Water Privatization, Continued
By Arnold Kling
Lynne Kiesling has two interesting posts on water privatization. In her first comment, she writes,
Suppose you are not persuaded by my argument that water utilities should be private companies and not municipal utilities. OK, but you could still contract out the management and operation of the water treatment and water delivery facilities to a private company that specializes in such services. Such a move could save taxpayers money and reduce operating costs, because the contractor has a comparative advantage in such services, more so than local governments. Such contracting out has delivered a lot of value in a lot of different countries over the past two decades.
In the follow-up, she writes,
Dynamic pricing of water would stir the creativity of entrepreneurs who would see an opportunity to profit from new technologies to treat wastewater and saltwater to make them potable, or at least usable in industrial and agricultural applications. Such a supply would simultaneously reduce strain on the supply of potable water.
For Discussion. Should water companies also offer different quality water at different prices?