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Rethinking Corporatization and Public Services in the Global South

Rethinking Corporatization and Public Services in the Global South

David A. McDonald


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After three decades of privatization and anti-state rhetoric, government ownership and public management are back in vogue. This book explores this rapidly growing trend towards ‘corporatization’ - public enterprises owned and operated by the state, with varying degrees of autonomy. If sometimes driven by neoliberal agendas, there exist examples of corporatization that could herald a brighter future for equity-oriented public services. Drawing on original case studies from Asia, Africa and Latin America, this book critically examines the histories, structures, ideologies and social impacts of corporatization in the water and electricity sectors, interrogating the extent to which it can move beyond commercial goals to deliver progressive public services. The first collection of its kind, Rethinking Corporatization and Public Services in the Global South offers rich empirical insight and theoretical depth into what has become one of the most important public policy shifts for essential services in the global South.
David McDonald is professor of global development studies at Queen’s University, Canada, and co-director of the Municipal Services Project. His research relates primarily to the delivery of essential services in the global South, and encompasses a broad spectrum of related questions around urbanization, environmental justice and uneven development.
'Is corporatization friend or foe of quality public service provision?  This book offers a thorough critique, providing a theoretical framework and a set of criteria for evaluating this new reform in public service delivery. Case studies from around the world show the potential benefits and pitfalls of corporatization and raise questions about the role of the state and the meaning of "public" in service delivery. This is a must-read for policy-makers, practitioners and scholars of public service reform.' Mildred E. Warner, Cornell University 'This book offers fresh thinking on corporatization and public enterprises and addresses important research questions in a multidisciplinary way. The analysis is grounded in new evidence and field research, making it essential reading for anyone interested in the benefits and risks of contemporary trends of governance reforms in the provision of essential public services.' Massimo Florio, University of Milan

Table of Contents

Section Title Page Action Price
About the editor i
Title iii
Copyright iv
Contents v
Figures and tables vi
Acknowledgements vii
Abbreviations and acronyms viii
1 Public ambiguity and the multiple meanings of corporatization 1
State of the debate 4
Corporatization in historical perspective 6
Neoliberal corporatization 9
A progressive future? 16
Research methods 18
Table 1.1 List of case studies 19
Table 1.2 Criteria used to evaluate corporatization 22
Notes 25
References 25
2 An exceptional electricity company in an atypical social democracy: Costa Rica’s ICE 31
An atypical social democracy 32
The evolution of electricity services in Costa Rica 35
ICE’s track record 37
Table 2.1 Current situation of the Costa Rican electricity sector vis-à-vis countries that have adopted market reforms 38
Figure 2.1 Electricity access in Latin America and the Caribbean 40
Figure 2.2 Average price of electricity in Latin America and the Caribbean 42
Table 2.2 Costa Rica’s installed generating capacity and power generation per source 44
Liberalization and corporatization of ICE 47
Conclusions 57
Notes 58
References 58
3 Hybrid water governance in Burkina Faso: the ONEA experience 62
Neoliberal macro-reforms and foreign aid 63
Millennium Challenges 65
Decentralization 66
Rural–urban divides 68
History of ONEA 69
ONEA today 74
Figure 3.1 Water prices in selected African countries 80
Conclusion 82
Notes 83
References 84
4 An ‘Arab Spring’ for corporatization? Tunisia’s national electricity company (STEG)\r 88
History of STEG 89
Contractualization = corporatization 91
Assessing STEG’s performance 92
After the revolution 98
Reflections and lessons learned 101
Notes 103
References 104
5 Modernization and the boundaries of public water in Uruguay 107
OSE in regional context 108
Table 5.1 Average annual investment per capita in selected Latin American countries in water supply and sanitation 109
History of OSE 110
A model public water company 115
Corporatization: blurring the public–private divide 123
Conclusion 130
Acknowledgements 132
Notes 132
References 132
Interviews 134
6 Can ‘public’ survive corporatization? The case of TNB in Malaysia 136
Table 6.1 The ‘standard menu’ for electricity reform 138
The Malaysian policy context 139
Table 6.2 OPP target ownership of share capital in companies, peninsular Malaysia, 1970–90 140
Table 6.3 Comparative GDP per capita (2000 US$) and poverty performance 144
The corporatization of TNB 145
Table 6.4 Electricity sector performance in selected Asian countries, 1987 146
Figure 6.1 Structure of authorities in the electricity sector in Malaysia 148
Post-corporatization performance 148
Table 6.5 TNB summary of financial performance, 2007–12 150
Table 6.6 Comparative electricity prices, ASEAN-4 153
Figure 6.2 Power sector reform proposals as applied to Tenaga’s current structure 158
Table 6.7 Emerging power sector reform proposals 159
Lessons learned 160
Notes 161
References 161
7 Quasi-public: water districts in the Philippines 164
A brief history of water services in the Philippines 166
Table 7.1 Philippine water utilities by type of management model 168
The (confused) corporate personality of water districts 168
LMWD’s corporate personality 170
Lessons learned 178
Note 181
References 181
8 Corporatization in the European water sector: lessons for the global South 185
Analytical framework 186
A brief history of corporatization in the EU 187
Advantages of corporatization in the EU 190
Problems with corporatization in the EU 194
Can corporatization strengthen public services? 198
Lessons for the global South 199
Acknowledgements 202
References 202
9 Corporatization is dead … long live corporatization? 207
Progressive corporatization? 209
Re-aggregation 212
References 214
About the contributors 218
Index 221