This paper tracks shifts in paradigms and practices around water financing historically to demonstrate how behind the border policy convergences have gradually emerged around key issues such as the diminishing role of the state in the provision of water services, shifts in public and private spending on water and an enhanced role for the private sector.
It draws on examples from around the world to examine how policy and institutional changes have been systematically created through the influence of multilateral and bilateral donor initiatives and discusses their implications for poor people’s access to water. It argues that there is often a gap between idealised notions of regulation and market ‘efficiency’ and the existing legal, administrative, socio-economic and political realities in the ‘Third World’ which can lead to the poor bearing the costs of changes in water financing.
A review of specific initiatives around water financing (e.g. the Camdessus Panel) reveals that recent calls for additional financing in the water sector in order to achieve the Millennium Development Goals vary considerably from agency to agency and are deeply political in nature. Moreover, global debates around water financing have been top-down in nature and lack participation from southern governments, civil society and poor people. The paper concludes by making a case for invigorating systems for public financing in order to provide water and sanitation for all.