Comparing private and public performance of Portuguese water services

Abstract

This article compares the performance of the Portuguese water services (WS) according to their ownership. Several techniques, such as performance indicators, total factor productivity and data envelopment analysis were used. First, the paper describes the water sector institutional framework in Portugal. Then, it reviews the major theories that relate performance to WS ownership and the main empirical studies developed in this area. Finally, it presents the case study. The conclusions drawn from the study seem to prove the outperformance of the WS under private management in Portugal when compared with the public ones. The quality of service provided by the former is better than that of the latter, which is particularly evident with regard to water quality. Productivity is also superior in private companies. However, the results suggest an opposite trend as far as efficiency is concerned.