The efficiency of post-reform water utilities in Mexico

The efficiency of Mexican water utilities was studied by applying double bootstrap data envelopment analysis (DEA). Efficiency scores were calculated and regressed against a set of explanatory variables to analyze the effect of type of management and reform policies on efficiency. Results indicate that the few privately managed utilities in the sample, which are subject to local regulation, may be more efficient than publicly managed utilities operating at different governmental levels. The creation of decentralized autonomous water utilities did not appear to increase efficiency, as was expected from the reform. The policy of cutting water service to non-paying customers, indicating a business orientation, was found to be positively correlated with efficiency.

Automated summary

The study found that privately managed water utilities subject to local regulation may be more efficient than publicly managed ones. Creating decentralized autonomous water utilities did not increase efficiency as expected, while the policy of cutting water service to non-paying customers was positively correlated with efficiency.