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

This report, written by an IISD consultant, evaluates the 'Istanbul version' of the OECD's Checklist for Private Sector Participation in Water Infrastructure released in March 2009. While acknowledging improvements over previous versions, the author argues that the checklist remains of limited operational value for practitioners due to internal contradictions, a failure to address systemic risks of international investment arbitration, and an over-reliance on outdated theoretical models regarding decentralization and regulation.

• The Istanbul version of the OECD checklist shows positive developments by encouraging responsible business conduct, acknowledging the importance of economies of scale, and recognizing that the water sector is susceptible to capture by vested interests or private operators.
• The author contends that the checklist fails to adequately highlight the risks posed to countries by international investment arbitration, noting that it ignores the lack of appeals systems, the potential for conflicts of interest among arbitrators, and the disregard for public interest issues.
• The report identifies a contradiction in the OECD's guidance on decentralization: the checklist promotes the devolution of authority to local levels for efficiency while simultaneously acknowledging that small-scale systems suffer from transaction costs and a lack of creditworthiness.
• The author argues that the checklist ignores the 'duty of efficiency' as a legal requirement for providers, incorrectly assuming that private participation automatically improves efficiency and erroneously presenting equity and efficiency as conflicting goals.
• The document criticizes the OECD's reliance on theoretical models of 'contestable markets' and 'price cap regulation,' stating that empirical research often contradicts these theories, particularly regarding information requirements and the actual occurrence of overinvestment.
• The author suggests that regulatory bodies should be placed at the national or state level rather than the municipal level to reduce the risk of capture by local political forces and interests.

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} }