Privatization, the World Water Crisis, and the Social Contract

T o deny someone the right to water is tantamount to denying them the right to life, and to set a price on water is to set a price on life. It comes as no surprise then to find a good amount of anxiety and contention over who gets to set the price of water and how much they charge. And over the past two decades, throughout both the developed and developing world, setting the price of water has fallen increasingly to private companies at the same time as various demographic changes have increased water scarcity. Thus we hear water described simultaneously in terms of both a humanitarian crisis of global proportions— one standard though very rough figure is that more than one billion people lack access to safe drinking water ~Davis 2005, 146; Black 2004, 28!—and as the “oil of the 21st century” ~Wessel 2005!. The lively discussion over the myriad roles played by private companies in the distribution of the world’s water—known collectively as “public-private partnership,” “private sector participation,” or merely “privatization”—falls roughly into two types, which I will here call “technical” and “moral.” The technical discussion, dominant in academic and policy circles, revolves around the relative costs and benefits of public versus private supply of water in terms of water quality, water pricing, capital investment, extent of water service, and environmental protection ~see the review of this literature by Davis 2005!. The moral discussion, dominated by activists ~Petrella 2001; Barlow and Clarke 2002; Shiva 2002! and activist journalists ~Rothfeder 2001; Ward 2002; International Consortium of Investigative Journalists 2003; Holland 2006!, focuses on water privatization as a facet of global corporate capitalism, with particular stress laid on the fact that the water industry is dominated by only a few transnational corporations, aided by World Bank and International Monetary Fund loan provisions requiring private sector participation in water infrastructure development ~Conca 2006, 221–3; Davis 2005, 154; Center for Public Integrity 2003!. To the extent that these authors concern themselves with the actual effects of privatization, it is usually to discuss a few well-known cases of failed privatization efforts, such as that which occurred in Cochabamba, Bolivia ~Finnegan 2002; Barlow and Clarke 2002, 154–5; Black 2004, 78–9; Conca 2006, 238; Davis 2005, 166–8!. While the technical discussion of water privatization largely fails to address the larger moral implications of its subject, the moral discussion of water privatization largely fails to suggest any realistic policy solutions, instead resorting in most cases to a call for “grassroots” control that, I argue, fails to address urbanization as one of the chief causes of world water scarcity. I thus seek to reconstruct the moral argument against water privatization by following the lead of many authors in defining the moral illegitimacy of water privatization in terms of the social contract. That is, if the moral responsibilities inherent in civil society are defined by the initial social contract ~Hobbes @1651# 1962, 101–2; Rawls 1971!, and if the current social contract allows for water privatization that denies the human right to water, then it is necessary to reformulate the social contract—or, as it has been called, the “world water contract” ~Global Committee for the Water Contract 1998; Petrella 2001!. The social contract delivers humankind out of that most fundamental collective action dilemma, the state of nature, by setting up a system of incentives that compels citizens to interact peacefully. Key to a successful social contract, then, is a system of incentives appropriate to a given state of nature, or, in other words, incentives premised on a reasonably accurate appraisal of human nature. “Human nature” is of course a construct of a specific place and time, which thus requires a different social contract in different contexts ~cf. Macpherson 1962!. I argue here that one problem with the moral argument against water privatization is that it fails to take urbanization into account in its implicit assumptions about human nature and thus formulates a world water contract inappropriate for an urbanizing world. The meaning of water is to some extent culturally relative ~Blatter, Ingram, and Levesque 2001; Espeland 1998!, yet few would question the fact that, across all cultures, some minimal level of water is necessary for basic sustainability ~Gleick 1996!, and the changes in land use that come from the industrialization and population growth known as “urbanization” create water stress that threatens sustainability ~see, for instance, UN World Water Assessment Program 2006, chap. 3!. I thus offer an alternative formulation of the world water contract for an urbanizing world; one that seeks to return to earlier notions of the city as a commercial association and which borrows and extends the notion of corporate citizenship from the literature on business ethics. While I hope my reformulation of the world water contract is more realistic than others, I readily admit that it is still probably of more theoretical than practical relevance. Possibly more importantly, I hope that my critique of moral arguments against water privatization will provide a new tool to those such as myself who teach about water politics and policy. Books by opponents of water privatization are often sensational and alarmist but they do raise legitimate concerns about the commodification of a natural resource that can help students recognize the significance of the otherwise seemingly arcane academic literature on water administration. The Richardson Dilworth is assistant professor of political science at Drexel University, author of The Urban Origins of Suburban Autonomy (Harvard University Press, 2005) and editor of Social Capital in the City: Community and Civic Life in Philadelphia (Temple University Press, 2006). He lives in Philadelphia and drinks mostly tap water. FEATURES