Growing role for the private sector in the provision of public services in Third World cities

This paper seeks to set forth for developing countries the context, experience, and issues or opportunities presented by privatization as it affects public service delivery. Following an introduction, the paper attempts to define privatization and its institutional forms. A third section discusses the classical theoretical basis for the division between public and private goods and services, and a fourth sketches some of the experiences of developing countries in private sector delivery of services related to water supply, transport, waste management, and maintenance. Finally, a summary is presented of some of the principal issues and opportunities presented by private sector participation in public services. In conclusion, the paper notes that the process of greater private participation in public sector service delivery and management in cities has begun well, but that to realize the potential of private participation governments in developingn countries must be able to decentralize some authority and adopt power-sharing with the private sector. A 4-page bibliography is appended. (Author abstract, modified)