Regulation of Water Supply and Sanitation Services: A review of experience in selected countries in Latin America

This chapter provides an overview of the organizational trends in the region in the past 40 years. It describes the special characteristics of WS&S services that make them a classic monopoly and delineates the general principles of and options for regulation. The discussion, which is based on a review of the literature, looks at sector reform and regulatory initiatives in Guatemala, Honduras, El Salvador, Nicaragua, Panama, Dominican Republic, Paraguay, and Bolivia. In general, these countries have relatively small populations (less than 10 million) and numerous small and medium-sized cities, the largest of which has a fraction of the population of the capital. These countries are at an early stage of the sector reform process.

The chapter concludes with some preliminary observations and recommendations for framing a regulatory system, including the delegation of economic regulation to local governments and quality or social regulation to the central government. A key observation is that the responsibilities of the central government should include setting and vigorously enforcing realistic drinking water and wastewater discharge quality and service standards, promoting competition and benchmarking.