Private Sector Participation in Water Infrastructure: OECD checklist for public action

The document evaluates the 2009 OECD checklist on private sector participation in water infrastructure. It acknowledges positive additions regarding responsible business conduct and sustainability but criticizes the checklist for contradictions regarding decentralization, a perfunctory treatment of international investment arbitration risks, and the omission of the 'duty of efficiency' as a legal requirement for providers.

• The Istanbul version of the OECD checklist includes several positive developments, such as encouraging responsible business conduct, stressing the importance of sustainability analysis, and acknowledging that public guarantees create contingent liabilities for public finances.
• The report identifies a contradiction in the OECD's messaging regarding decentralization: the checklist acknowledges that small systems suffer from transaction costs and lack of creditworthiness due to a lack of economies of scale, yet it simultaneously suggests that efficiency has driven the devolution of authority to local levels.
• The author argues that the checklist's treatment of international investment arbitration is insufficient and overly optimistic, ignoring risks such as the lack of appeals systems, conflicts of interest among arbitrators, and the tendency of tribunals to treat contract breaches as violations of investor rights.
• The document claims the OECD checklist fails to establish the 'duty of efficiency' as a crucial legal obligation for providers, incorrectly assuming that private participation automatically improves efficiency and treating equity and efficiency as conflicting rather than complementary goals.
• The report criticizes the checklist for suggesting that local governments should hold regulatory power, noting that placing provision and regulation at the same government level increases the risk of capture by local political forces and interests.
• The author asserts that the checklist relies on outdated arguments from the 1980s and 1990s and fails to incorporate critical empirical research, specifically regarding the differences between price cap and rate of return regulation.

APA

Solanes, M. (2009). Private Sector Participation in Water Infrastructure: OECD checklist for public action. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/water_infrastructure_istanbul.pdf

Chicago

Solanes, Miguel. Private Sector Participation in Water Infrastructure: OECD checklist for public action. International Institute for Sustainable Development, 2009. https://www.iisd.org/system/files/publications/water_infrastructure_istanbul.pdf.

Wikipedia

{{cite report |last1=Solanes |first1=Miguel |title=Private Sector Participation in Water Infrastructure: OECD checklist for public action |publisher=International Institute for Sustainable Development |date=December 2009 |url=https://www.iisd.org/system/files/publications/water_infrastructure_istanbul.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{solanes2009private, author = {Solanes, Miguel}, title = {{Private Sector Participation in Water Infrastructure: OECD checklist for public action}}, institution = {International Institute for Sustainable Development}, year = {2009}, month = dec, url = {https://www.iisd.org/system/files/publications/water_infrastructure_istanbul.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }