World Development Vol. 56, pp.

16–31, 2014
Ó 2013 Elsevier Ltd. All rights reserved.
0305-750X/$ - see front matter
www.elsevier.com/locate/worlddev
http://dx.doi.org/10.1016/j.worlddev.2013.10.008

Does Commercialization Undermine the Benefits

of Decentralization for Local Services Provision?
Evidence from Mexico’s Urban Water and Sanitation Sector
VERONICA HERRERA *
University of Connecticut, USA
Summary. — Decentralization has been promoted as a means to better reflect citizen preferences and improve local services. Many
developing countries decentralized and promoted neoliberal policies such as commercialization simultaneously, leaving mayors with
the responsibility of improving public services through self-financing reforms. This study evaluates experiences in three Mexican cities
to assess whether decentralization and commercialization practices have resulted in improved water and sanitation services. It finds that
commercialization has increased social conflict surrounding urban services provision and that local institutional constraints further
undermine mayor’s ability to adopt politically contentious policies. The result has been stalled and uneven service improvements.
Ó 2013 Elsevier Ltd. All rights reserved.

Key words — Latin America, Mexico, water, decentralization, commercialization, public services

1. INTRODUCTION takes” to improve public services through self-financing re-

Effective local government can be a catalyst for develop-
ment. Democratic transitions and decentralization reforms
have brought the importance of local government perfor-
mance to the forefront of development studies (Andersson,
Gibson, & Lehoucq, 2006; Angell, Lowden, & Thorp, 2001;
Crook & Manor, 1998; Grindle, 2007; Larson, 2002; Olowu
& Wunsch, 2004). Local government’s ability to “deliver”
increasingly determines citizens’ access to quality public ser-
vices, economic development opportunities, and local environ-
mental resources. Positive local government performance has
not only been associated with important development out-
comes, but also with bolstering citizen’s perception of demo-
cratic governance more broadly (Hiskey & Seligson, 2003;
Weitz-Shapiro, 2008).
Policymakers have argued that when services are “brought
closer to the people,” citizens may be able to more effectively
hold governments accountable for service improvements. 1
Proponents have reasoned that locally administered services
would better fit local needs and citizen preferences, increasing
accountability and government responsiveness, because citi-
zens—as participatory agents—would have a more direct
interest in, and provide support for, better government. 2
While a broad literature has examined factors that shape
decentralization outcomes, less attention has been paid to
how neoliberal policies shape decentralization 3 outcomes in
local services provision. Neoliberal, or market-oriented, poli-
cies for public services include eliminating subsidies for service
provision, implementing commercialization strategies to re-
cover costs of services through user fees, and generally apply-
ing business management strategies. Decentralization and
neoliberal policies for public services have been frequently
promoted in tandem, which makes the lack of attention to
how these two processes interact surprising. This study at-
tempts to fill this lacuna. How do neoliberal policies affect
the potential benefits of decentralization when administered
at the local level? What types of institutional constraints do
municipal governments face when contemplating the adoption
of neoliberal policies? Do local governments “have what it
16
forms that may face considerable political resistance?
This paper argues that when combined with neoliberal com-
mercialization practices, “bringing services closer to the peo-
ple” can increase political conflict surrounding public
services delivery, which can adversely affect public services
performance. In addition, the intense political conflict that
commercializing public services occasions can undermine the
potential benefits of decentralization, such as increased user
buy-in for services, participation, and accountability. This pa-
per makes two arguments based on evidence from Mexico’s
urban water and sanitation (W&S) sector. First, following
decentralization, local governments were made to adopt com-
mercialization practices as part of a wider neoliberal reform
package that generated extensive social backlash. Commer-
cialization featured dramatic tariff increases and stringent col-
lection enforcement that were politically unpopular due to a
long history of subsidized or free water service. Although poor
service quality is not without political costs to mayors, the dis-
satisfaction consumers have with services is often diffuse and
disperse, whereas price increases, particularly given the delin-
quent services being provided, are more likely to generate
acute backlash. Second, important institutional constraints
at the municipal level further impeded the adoption of socially
contentious commercialization policies. These institutional
constraints include three-year municipal administrations, a
prohibition on immediate re-election, administrative
* I would like to thank Colleen Phelan, Gabriela Tafoya, and Stephanie
Ullrich for research assistance. The research for this project was supported
by the Fulbright Institute for International Education program, the
University of California Institute for Mexico and the United States (UC
MEXUS) Dissertation Research Grant, and the Simpson Memorial
Fellowship at the Institute for International Studies at the University of
California, Berkeley. I am very grateful to Kent Eaton, Lindsay Mayka,
Jennifer Brass, Jefferey Sellers, and three anonymous reviewers for
thoughtful suggestions on this draft, and Alison Post and Ruth Berins
Collier for extended feedback on the overall project. Final revision acce-
pted: October 5, 2013.
 EVIDENCE FROM MEXICO’S URBAN WATER AND SANITATION SECTOR
appointments that follow the electoral calendar, and a lack of
a civil service program. These constraints have shortened the
policymaking window of municipal government and further
weakened its capacity to govern. Taken together, these politi-
cal and institutional challenges have compromised the ability
of urban governments to improve public services through
self-financing reforms after decentralization.
(a) Methods
I utilize “process tracing” to examine how macro level pro-
cesses interacted with local level context to create disincentives
to improving local services. This study examines Mexico, a
country that has experienced an extensive amount of both
decentralization 4 and neoliberal policies, and selects the
W&S sector, which 79% of all Mexican mayors list as the most
important municipal responsibility (Moreno-Jaimes, 2007a, p.
142). Process tracing unpacks the causal mechanism as a se-
quenced “chain of events” (Beach & Pedersen, 2013; Bennett,
2010, p. 209; Falleti & Lynch, 2009); specifically the study
traces how two-macro-level processes—decentralization and
neoliberal commercialization—interacted with the political
and institutional context within Mexican municipalities to dis-
incentivize the adoption of cost recovery, adversely affecting
service outcomes. This qualitative method allows me to under-
score the “decision process” actors used, what stimuli actors
responded to, and the impact of institutions on behavior
(George & McKeown, 1985, pp. 21–58). I utilize evidence
gathered during extensive field research that entailed 180 in-
depth interviews, data collection from internal government
documents, newspaper articles, and archival material. The
causal leverage of this study is gained from “within-case” anal-
ysis, which methodologists have recently noted provides great-
er causal inference than controlled case comparisons with a
small number of cases (Beach & Pedersen, 2013, pp. 81–82;
Brady & Collier, 2010, p. 10; George & Bennett, 2005, Chapter
8; Goertz & Mahoney, 2012, pp. 87–90).
Three municipal cases are presented to demonstrate the dif-
ferent pathways through which political conflict and institu-
tional constraints can impede service improvements. 5 I select
three of the largest urban centers within the same state govern-
ment, Mexico State (Estado de México): Naucalpan,
Nezahualcóyotl (Neza), and Toluca. Mexico State is an eco-
nomic powerhouse: it has the highest Gross Domestic Product
(GDP) contribution of any state, at 8.8% of GDP, and it is
also the most densely populated state in Mexico, with 13.8%
of the population (CNA, 2011a, p. 16). Mexico State is a crit-
ical case for examining whether decentralization and commer-
cialization policies have helped improve public services in
Mexico more broadly. Such a wealthy state would be the least
likely to have public services deficiencies, so if we identify ser-
vice problems within Mexico State’s urban centers, we are
likely to see them throughout the country in poorer and less
industrialized regions. Selecting cities within one state govern-
ment allows me to hold constant a number of important fac-
tors that would vary more widely in cross-national designs
(Snyder, 2001), and further control for variation in state level
policy toward urban services. 6 However, these cities, with var-
ied geographies and water availability, and varied political
competition and socioeconomic class makeup, also reflect
the type of geopolitical variation found throughout Mexico.
Finally, I present data for a larger number of cases, including
national averages, and taken together, I argue that the data
suggest that the challenges faced by these three cities after
these macro-level reforms plague the majority of Mexican
municipalities, although future research into the conditions
17
of W&S in each state would help to make this conclusion more
definitive.
The next section situates the argument around debates in the
literature, and Section 3 reviews the federal promotion of
decentralization and commercialization in Mexico’s W&S
sector. Section 4 presents available data for a wider range of
cities in Mexico and Section 5 examines three urban cases to
evaluate the impact of commercialization policies and local
institutional context on W&S performance after decentraliza-
tion.
2. DECENTRALIZATION, COMMERCIALIZATION,
AND GOVERNMENT PERFORMANCE
Despite its theorized benefits, much of the literature examin-
ing decentralization and local government performance finds
that decentralization has not turned out to be a panacea in
practice. Studies have found that decentralization may exacer-
bate regional inequalities (Mizrahi, 2004; Prud’homme, 1995,
pp. 202–205), be captured by local elites (Blair, 2000, p. 25;
Boone, 2003; J. Fox, 1994; Selee & Tulchin, 2004, pp. 309–
310) or hampered by local-level corruption (Prud’homme,
1995, p. 211; Veron, Williams, Corbridge, & Srivastava,
2006). Coordination problems within government (Fiszbein,
1997, pp. 1039–1040; Francis & James, 2003, p. 333) as well
as aid agencies (Smoke, 2003, p. 13) may also undermine local
performance. 7 Others have noted that decentralization strate-
gies have in some cases reinforced central control (Dickovick,
2007; Eaton, 2001; Wunsch, 2001), and in other settings made
municipalities dependent on intermediate tiers of governments
(Fenwick, 2010, pp. 166–176; Grindle, 2007, pp. 29–33).
A number of studies are more optimistic about local govern-
ment performance outcomes after decentralization. Numerous
studies have examined how participatory governance institu-
tions can bolster government performance, 8 and how strong
civil society networks increase the effectiveness of local policy-
making after decentralization (Agrawal & Ostrom, 2001, p.
508; Andersson et al., 2006, p. 580; Devas & Grant, 2003, p.
315; Faguet, 2009; Fiszbein, 1997, pp. 1034–1035; Kauneckis
& Andersson, 2009; Tendler, 1997). Many studies emphasize
leadership as a key ingredient for improving local government
performance after decentralization. Decentralization can ush-
er in educated and capable mayors, whose leadership and
innovation may transform city hall (Cabrero-Mendoza,
2000, pp. 377–378; Fiszbein, 1997, p. 1033; Gilbert, 2006,
pp. 404–405; Grindle, 2007, pp. 85–104). Mayors may play a
crucial role in determining whether decentralization man-
dates—in many cases from above—will be implemented
(Andersson et al., 2006, p. 577; Devas & Grant, 2003, p.
315). Even instances of increased civic participation have been
linked to mayoral initiative in sponsoring spaces for delibera-
tion and accountability (Andersson & Laerhoven, 2007; Fisz-
bein, 1997, pp. 1034–1035; Van Cott, 2009; Wampler, 2007, p.
4). While mayoral will is important for municipal reform, I ar-
gue that decentralization strategies may be part of a larger
package of policies that when taken together, hinder the abil-
ity of mayors to improve government performance despite
best intentions or innovative policymaking. Specifically, when
decentralization is accompanied by unpopular commercializa-
tion policies, mayors may lack the political incentives to re-
form services.
Commercialization of public services has been a pervasive
policy initiative in many developing countries around the
world and has been promoted as part of a wider package of
neoliberal policies for the public sector. These policies are
18 WORLD DEVELOPMENT
ideologically consistent with New Public Management
(NPM) 9 strategies designed to modernize government
through the application of market principles (Barzelay &
Armajani, 1992; Batley & Larbi, 2004, pp. 31–53; Islam,
1993; Osborne & Gaebler, 1992). NPM strategies have in-
cluded managed competition, performance contracts, the cre-
ation of autonomous service providers, 10 and promoted full
cost recovery through the rigorous application of user fees.
Based on these market-oriented tenets, the public sector has
also adopted private sector accounting and budgeting prac-
tices, the use of performance indicators, outsourcing of por-
tions of services delivery, the use of external consultants,
and the concept of the citizen as customer. In the W&S sector,
commercialization has been widely adopted (Bayliss, 2008;
Dagdeviren, 2008; Furlong & Bakker, 2010; Gilbert, 2007;
Krause, 2009; Morgan, 2011; Nickson & Franceys, 2003;
Smith, 2004). These reforms have also been promoted in other
urban services, such as trash collection, electricity, and trans-
portation (Gilbert, 2006, p. 406; McDonald & Smith, 2004,
pp. 1469–1470; Mehta & Pathak, 1998; Miraftab, 2004, pp.
876–877) and health care and education (Colclough, 1997; Gil-
son, 1997; Nolan & Turbat, 1995). While a handful of studies
stress that reforming services largely through cost recovery
provokes social backlash (McDonald & Ruiters, 2005; Mor-
gan, 2011; Smith, 2004), less is known about why commercial-
ization of public services is politically unpopular and how the
political challenges of commercialization may undermine
decentralization objectives.
Commercialization of services provision entails breaking
with historic clientelist exchanges of subsidized services in ex-
change for political support. For W&S, commercializing ser-
vices implies steep tariff increases, stringent collection
practices that suspend service for non-payment, the elimination
of clandestine (or informal) connections, and the introduction
of metered service or pre-paid meters. These practices can be
especially contentious for the urban poor who are dispropor-
tionately disadvantaged by tariff hikes and rely heavily on clan-
destine connections. Commercialization of services can
engender extreme dissatisfaction, litigation, and mass mobili-
zation. Mayors may also find commercialization unappealing:
they may want to avoid social backlash, continue to benefit
from clientelistic exchange, or prefer not to expend resources
in collecting fees. These challenges can be exacerbated in new
democracies where new parties may be governing at the local
level for the first time. If centralized governments thought it
politically expedient to subsidize services historically, I argue
that local governments are even less poised to adopt socially
contentious commercialization practices.
In addition, local governments often suffer from administra-
tive shortcomings that hinder performance, such as inexperi-
enced and under-qualified staff (Crook & Manor, 1998, p.
287; Wunsch, 2001, p. 281). Mexican municipal employees
are often inexperienced due to a lack of a local civil service,
and cronyism in personnel appointments (Cabrero Mendoza,
2007, p. 166; Camp, 2003, pp. 117–122; Moreno-Jaimes,
2007b). Other shortcomings of municipal government are
structural, such as prohibitions on immediate re-election, short
three year administrations, and the lack of legal authority to
mandate legislative action, leaving municipal policies “non-rat-
ified” in legislation and prone to policy reversal (Cabrero-Men-
doza, 2000, pp. 379–380).
Examples of these institutional constraints are found
throughout Latin America. 11 For example, re-election is pro-
hibited in countries such as Mexico, Guatemala, Honduras,
and Paraguay. 12 And in many countries, local government
administrations are relatively short, from 2 to 4 years.
Furthermore, mayors often control city council agendas with-
out counterweights, replicating systems of centralized control
at the local level (Cabrero-Mendoza, 2000, p. 380), and mak-
ing reform agendas overly dependent on the mayor’s will.
These types of institutional constraints—all of which are per-
vasive in Mexico—weaken local policymaking capacity and
make even the most innovative mayors’ reform agenda subject
to policy reversal. The possibility of passing socially conten-
tious reforms and making them “stick” in the long-term is
an overwhelming challenge in this type of weak institutional
environment.
3. BACKGROUND: FEDERAL ADOPTION OF
DECENTRALIZATION AND COMMERCIALIZATION
POLICIES IN W&S
(a) Conditions prior to reforms: centralization and subsidies
(1946–1976)
Like many countries in the west, the history of Mexico’s
water management has vacillated between local (pre 1946),
centralized (1946–1976), 13 and local (post 1980s). Although
the 1917 constitution designated water services as a municipal
responsibility, Mexico’s federalist system was highly con-
trolled by the center, and water services were no exception.
The creation of the National Water Ministry (Secretarı́a de
Recursos Hidráulicos, or SRH) in 1946 centralized many exist-
ing local water systems and began a period of network expan-
sion throughout the country under one-party Partido
Revolucionario Institucional (PRI) rule. PRI officials recog-
nized the role of water for irrigation as central to economic
development, but also viewed developing urban water services
as fundamentally important for development objectives (Abo-
ites, 1998, p. 162; Whiteford & Melville, 2002, p. 16). By 1973,
the SRH operated water systems directly in 554 cities, and
indirectly financed and administered at least 400 other systems
throughout the country (World Bank, 1976, p. 25).
Control of these systems from the center was pervasive: util-
ities were managed from Mexico City in a top-down fashion,
making it difficult for local operators to even change a water
valve without authorization from the center. It was common
for the federal government to construct a local water project
without any input from local leaders or citizens, and then
transfer systems to locals who felt little ownership of the pro-
ject and had few system maintenance resources (World Bank,
1992, p. 45).
Centralized control of water systems was further reinforced
by subsidized financing schemes. Water fee structures were
outdated and there was no “consumer base;” citizens received
water free of charge or for a token fee. One federal document
notes that payment was often not collected, metering was min-
imal, and water prices remained low (SARH, 1976, p. 291).
Table 1 shows 1960s tariffs ranging from $MXP 0.68–0.74,
but official figures indicate that the average cost of providing
service ranged from $MXP 1.50–1.75 (SRH, 1973, p. 208).
Prices were not only low for domestic consumers, one study
notes that commercial and industrial users were charged only
30% of the long-run marginal cost of providing service (World
Bank, 1990, p. 13). A 1964 international mission notes that
“even though operating agencies admit their water rates are
too low, both in respect to costs and to the capacity of the peo-
ple to pay, the rates have not been sufficiently increased be-
cause of inertia and political considerations” (World Bank,
1964, p. 2). Another observer notes: “fees collected. . .seldom
cover[ed] the maintenance costs of the water supply
 EVIDENCE FROM MEXICO’S URBAN WATER AND SANITATION SECTOR
Table 1. Water tariffs in 1960s Mexico
Population Price per m3 ($MXP)
>2,500 $0.68
2,500–5,000 $0.73
5,000–20,000 $0.67
20,000–50,000 $0.71
50,000–100,000 $0.68
>100,000 $0.74
Source: SRH (1973).
system. . .people are simply not accustomed to paying for
water” (Rodrı́guez, 1997, p. 120).
Economic crisis and demographic growth revealed the cen-
tralized era of water provision to be financially untenable by
the 1970s. Many connections suffered from poor service qual-
ity, leading the population to suffer a relatively high incidence
of water-borne disease and a child mortality rate of over 70
times that of the United States (World Bank, 1975, p. 10).
70% of urban populations had access to piped water, and sew-
erage coverage was much lower at 40%. The unreliability of lo-
cal systems led many businesses to operate their own
boreholes; indeed, the share of industrial and commercial con-
sumption totaled only 10% of total consumption in 1990
(World Bank, 1990, p. 5).
(b) Decentralization and commercialization policies
(1980s–2012)
Decentralization and commercialization practices were two
distinct policies promoted in the urban W&S sector under a
larger rubric of public sector reform in Mexico. 14 Decentral-
ization of water services began with the dismantling of the
SRH in 1976. In 1980, a presidential decree transferred
1,549 federally administered systems to state and municipal
governments (DOF, 1980; SAHOP, 1981), and in 1983, a con-
stitutional amendment to Article 115 mandated decentraliza-
tion of water services to municipalities. By the time the
National Water Commission (CNA) was created in 1989, it
was designed to be an institutional rector for (among other
things) promoting decentralization and commercialization,
but unlike its predecessor, was not to deliver services directly.
In the event of municipalities being unable to provide services,
state governments became the “provider of last resort.”
Concurrently, international financial institution (IFI) policy
influenced both decentralization and commercialization prac-
tices in the urban W&S subsector, as part of a broader neolib-
eral multi-sector water reform (including urban, rural,
irrigation, and watershed management) (Wilder & Romero
Lankao, 2006). IFI loans in the urban W&S subsector that be-
gan in 1975 15 and expanded in the 1990s promoted a new
market oriented federal policy in urban W&S. A National
Water Law in 1992 reflected the changing global water policy
environment of treating water as an economic good, permit-
ting private sector participation (PSP), and allowing for trad-
able water rights. Despite considerable promotion of
privatization in the 1990s, privatization contracts for W&S
have been limited. Table 2 describes a total of 30 contracts,
which account for less than 2% of all water services in the
country (INEGI, 2009, p. 9). 16
The more pervasive policy has been promoting commercial-
ization practices within the public sector for decentralized,
municipal utilities; a policy agenda aided by IFI loans. In
the early 1990s, the federal government created a program
called APAZU (Programa Nacional de Agua Potable y
Alcantarillado en Zonas Urbanas) (see Appendix A), where
19
Table 2. Private participation in Mexico’s water and sanitation sector
PP type Project count
Concession 5
Greenfield projectsa 24
Management & lease 1
Total 30
Source: PPIAF. Downloaded April 2012.
a
Includes build, lease & transfer (BLOT); build, operate & transfer (BOT)
and build, own & operate (BOO).
loan conditions mandated operating rules that strengthened
commercialization practices for urban utilities. APAZU re-
quired “performance based financing,” whereby urban utilities
were to raise “matching funds” through cost recovery in order
to qualify for APAZU funds for infrastructure development.
IFI loan conditions mandated that the CNA eventually elim-
inate grant based subsidies to the sector, and sector financing
derived from IFI loans follow APAZU operating rules (World
Bank, 1990, p. 11).
In order to access APAZU funds, urban utilities would have
to be decentralized to the municipal level and operate with le-
gal, fiscal, and administrative autonomy from city hall (World
Bank, 1990, pp. 15–17). A legally autonomous water utility
has independent legal character in court (can sue or be sued).
Fiscal independence implied the ability to generate internal
revenue from user charges, set budgets and determine expendi-
tures, and receive federal revenues directly. Administrative
autonomy signified independence in hiring decisions and oper-
ational policy. Proponents hoped that by creating autono-
mous utilities, mayors would be blocked from intervening in
daily operations and fiscal accounts. The policy objectives
for APAZU were reflected in the National W&S Program
for 1989–1994, which emphasized treating water as an eco-
nomic good, cost recovery, service suspension for non-pay-
ment, and “performance-based” financing schemes (CNA,
1993, pp. 47–48, 59–68). APAZU operating rules prompted
most major metropolitan cities to create legally autonomous
utilities 17 and as of 2009, a total of 2,571 legally autonomous
utilities have been created, 637 of which serve populations
over 20,000 (IMTA, 2011). 18
Have decentralized W&S utilities been able to improve ser-
vice provision through commercialization reforms? The fol-
lowing section provides a general overview of utilities
performance in Mexico that suggests that utilities are, on aver-
age, generally underperforming after the implementation of
these twin reforms.
4. MEASURING AND COMPARING W&S
PERFORMANCE IN MEXICO
Against what metrics should Mexico’s W&S sector be as-
sessed and how should performance or underperformance be
measured? International benchmarking indicators for the
W&S sector measure performance by “core” indicators such
as coverage, physical efficiency of the network (volume con-
sumed/volume produced and volume billed/volume pro-
duced), and fiscal indicators such as commercial efficiency
(revenue collected/revenue billed) and % metering (see IB-
NET, n.d.). Additional measures, such as service intermittency
and water quality/potability, help provide a fuller picture of
service quality.
Using these types of measures, I evaluate the level of
“success” of the current state of Mexico’s W&S sector by
20 WORLD DEVELOPMENT
assessing whether there have been improvements over time
with respect to the stated goals of federal level policymakers
implementing decentralization and commercialization. 19
These goals were to increase coverage, the physical efficiency
of systems, water quality and reliability, increase internal rev-
enue generation, and decrease reliance on federal subsidies
through cost recovery, and decrease environmental pollution
(CNA, 1994, pp. 9–10; World Bank, 1990, pp. 10–16). It is dif-
ficult to measure performance in Mexico’s W&S because of
poor record keeping and the pervasive manipulation of perfor-
mance figures by utilities attempting to access federal funds
based on high performance. 20 The figures published by the
CNA are self-reported, and there is no independent verifica-
tion to confirm their accuracy (Interviews #13, 19, 28). Never-
theless, CNA figures, while imperfect, provide the only
available national averages of sector performance, and wher-
ever possible, I have included other data collected during field
research that lends further evidence for the conclusions being
drawn.
Initial observations of increased performance seems promis-
ing: in 2010, Mexico had a national average of 91.2% water
coverage and 89.9% sanitation coverage, increases from
81.9% to 65% respectively, since 1991 (CNA, 1992, p. 10,
2011b, p. 22). This varies by state, as evident in Appendix B.
However, coverage data can be misleading and obfuscates
serious deficiencies in service provision as measured in other
types of performance figures.
First, the amount of non-revenue water (volume billed/vol-
ume produced) in urban centers is approximately 47% (CNA,
2010, p. 12) and in some cities considerably higher (CNA,
2012, p. Annex 1a; Universal., 2009b). Therefore, half of the
water being extracted is being diverted (an estimated 84% of
lost water is due to leaky infrastructure and 16% to clandestine
connections) (CNA, 2010, p. 12). Problematically, the 2012
non-revenue water figures have increased from reported num-
bers in 2000, which were 41% nationwide and 35% for urban
centers (CNA, 2000, p. 26). A study by the Mexican Institute
of Water Technology (IMTA) finds that physical efficiency as
measured in terms of volume consumed/water produced has
increased by less than 2% since 2002 (IMTA, 2011). 21 There-
fore, the physical condition of the network infrastructure, on
average, has worsened over time, or failed to noticeably
improve. 22
Second, intermittent service seems to affect a large portion
of the population and does not appear to be decreasing. In
2000, one study estimated that 45% of households experienced
daily intermittency and 55% of households periodic intermit-
tency in 2000 based on census data (World Bank, 2005, p.
27). Another survey in 2011 used a sample of utilities to esti-
mate that intermittent service affected 24.2% of consumers in
2002 and increased to 28.5% in 2011 (IMTA, 2011). Of the
11 utilities surveyed during field research, only one of them
provided non-intermittent service, in the others many consum-
ers receive water 2–3 times a week, a pervasive problem in
non-wealthy neighborhoods. While water intermittency is dif-
ficult to measure and data are sparse, taken together, these
data points suggest that water intermittency is a substantial
service deficiency in Mexico, and seems to either be increasing
or staying constant over time.
Third, water potability remains a serious problem through-
out the country. Water is contaminated throughout various
points in the network: through pipes, in household cisterns,
and due to ruptures in under-attended sewage lines. Danger-
ous compounds such as arsenic are routinely treated with little
more than chlorine. 23 Water potability has become such a
concern that in 2010, Mexico became the world’s largest
consumer of bottled water, increasing from 157 liters per
capita in 2003 to 480 liters per capita in 2010 (IADB, 2010,
p. 15). While water-related health indicators have improved
over time in Mexico, 24 they remain worse than other upper-
middle income countries in Latin America; the mortality rate
associated with intestinal infectious disease in Mexico in 2005
was twice as high as in Argentina, four times as high as in
Costa Rica, and 15 times as high as in Chile (World Bank,
2005, p. 28, footnote 56). The pervasive “opting out” of tap
water ingestion in Mexico suggests that widespread mistrust
of municipal water may be due to poor water quality that
has either decreased, or failed to noticeably improve over
time. 25
Fourth, although there are no reliable figures on water util-
ity revenue generation in Mexico, available data on the extent
to which utilities have become fiscally self-sufficient are dis-
couraging. While CNA data show a national average of
73.8% of commercial efficiency in 2012 (CNA, 2012, p. 60),
up from 46.2% in 2000 (CNA, 2000, p. 23), an analysis con-
ducted by IMTA of CNA figures (using a different sample
population) shows that commercial efficiency as a national
average has increased by only 1% in the last decade (IMTA,
2011). 26 In addition, the amount of metering as a national
average has not increased substantially, with CNA figures reg-
istering a considerable decrease from 67.4% in 2003 to 47.4%
in 2011, and IMTA figures (using a different sample popula-
tion) registering a 3% increase during the same period (IMTA,
2011). These figures present limited increases or even decreases
in commercial efficiency and metering by the part of utilities
and suggest limited to no improvements, on average, in fiscal
self-sufficiency. Given that the total investment made in the
sector since 2002 has doubled from 2002 to 2011, from .17%
to .32% of GDP (IMTA, 2011), these data suggest that, on
average, sector financing has not become less reliant on federal
transfers.
Environmental degradation has also increased in terms of
over extraction of underground aquifers and discharge of un-
treated wastewater. The number of over extracted aquifers (as
defined by extracting at a greater rate than annual replenish-
ment by the hydraulic cycle) has grown considerably in recent
decades, from 32 in 1975 to 100 in 2009 (CNA, 2011a, p. 34).
Over extraction results in the entry of dangerous mineral com-
pounds in drinking water, and will have important negative
consequences for future water security. Although wastewater
treatment capacity has increased, from 394 treatment plants
in 1992 to 2,289 in 2011 (CNA, 2012, p. 49), field research re-
vealed that a surprising number of these plants are not actually
in operation, or are operating below their installed capacity due
to disrepair, lack of technical expertise, or insufficient funds to
operate. While the CNA has commissioned experts to tackle
environmental degradation of watersheds, virtually no pro-
graming exists for local utilities that promote lessening environ-
mental degradation (Barkin, 2011, pp. 387–389).
Nevertheless, it is clear that some utilities in Mexico have
performance figures that are quite high. For example Table 3
presents a sample of performance indicators for 12 utilities
published by the CNA 27 where cities like Mexicali, Monter-
rey, and Tijuana register relatively high levels of physical
and commercial efficiency. Indeed, there are a handful of
“high” performers (e.g., CNA, 2011b, p. 93) throughout the
country that have nearly full metering, over 90% commercial
efficiency, over 70% physical efficiency, and that have man-
aged to decrease the amount of non-revenue water and service
intermittency in the last decade.
However, I argue that barring a handful of these notable
exceptions, the majority of urban utilities in Mexico have
 EVIDENCE FROM MEXICO’S URBAN WATER AND SANITATION SECTOR 21

Table 3. Comparing water and sanitation utilities performance in 12 cities

Cities Physical Commercial Global Metering No. employees/1000 Water
efficiencya (%) efficiencyb (%) efficiencyc (%) residential (%) connections availabilityd
Acapulco 34 82 28 41 9.6 419
Aguascalientes 64 92 59 2.5 304
Chetumal 37 68 25 8.8 390
Guadalajara 63 89 56 89 2.9 207
Hermosillo 63 68 43 3.7 333
Merida 35 86 30 3.5 306
Mexicali 87 75 66 3.9 284
Monterrey 70 95 67 100 4.1 250
Tijuana 81 96 78 3.2 166
Tlaxcala 56 93 52 1 5.3 366
Torreon 53 86 45 3.5 319
Xalapa 40 92 37 100 12.2 358
Source: CNA (2011b).
a
Water billed/water produced.
b
Revenue collected/revenue billed.
c
Physical efficiency  commercial efficiency.
d
m3/person/day.

Table 4. Water and sanitation utilities performance in three cities under study
Cities Water Sanitation Physical Commercial Non-intermittent Metering (%) No. employees/1000
coverage (%) coverage (%) efficiency (%) efficiency (%) service (%) connections
Naucalpan 97 95a 60 80 60 52 10.7
Toluca 88 92 55 64 60 7.6 5.5
Neza 87 98a 66.5 53 ND .18 4.12
Source: Author’s calculations based on CISA, 2007; AYS, 2008a, 2008b, 2008c; OAPAS, 2008a, 2008d; Interviews #62 and 76.
a
Due to a lack of available data for this indicator, official coverage figures are used from INEGI (2010).

not experienced considerable increases in service performance
or commercial efficiency in the last decade, and many of them
are fiscally insolvent.
Table 4 documents performance indicators for the three
cases under study in this paper. These figures are based on
internal documents gathered during field research and in some
cases contradict published “official figures” by the federal gov-
ernment.
For example, although the national census claims that Ne-
za’s water coverage is 97% (INEGI., 2010), internal docu-
ments indicate that coverage is closer to 87%, and that only
approximately 50% of the city has registered connections
(CISA, 2007, p. 24). Municipalities throughout Mexico State
have been unable to make important service improvements
due to insufficient cost recovery. A 2007 audit of Mexico
state’s 36 utilities show that half of all utilities and 3=4 of metro-
politan utilities are fiscally insolvent and that most do not re-
cover enough revenue to invest in minimal service
improvements (Poder Legislativo del Estado de México,
2008). While reliable data are difficult to attain and interpret,
data triangulated through multiple sources suggest that the
utilities analyzed in this study are representative of the types
of service deficiencies found throughout the country.
The following section analyzes performance upgrades across
Naucalpan, Toluca, and Neza and demonstrates the political
and institutional challenges of implementing commercializa-
tion after decentralization.
5. EVALUATING REFORM EXPERIENCES IN
THREE CITIES
The three cases demonstrate the different pathways through
which political conflict and institutional constraints reduce the
likelihood that commercialization policies will be adopted and
sustained over time. Naucalpan—due to a higher income con-
sumer base and innovative mayoral leadership—was some-
what more successful than the other two cities in generating
some internal revenue and making some service improve-
ments, but the extent to which these reforms will endure over
time is uncertain. Toluca lacked strong leadership, but also
faced a greater amount of urban poor users, less industrial cli-
ents, and a greater amount of “non-billable” consumers such
as public institutions. Neza failed to initiate any cost recovery
reforms, encumbered by an urban poor consumer base, a
highly deficient network infrastructure, and extensive adminis-
trative mismanagement.
(a) Implementing substantial commercialization in Naucalpan
Naucalpan is peri-urban to Mexico City; an industrialized
corridor where rapid industrialization in the 1950s gave rise
to an influx of migration from surrounding states. As the need
for labor grew, irregular working class settlements developed
in the highlands of the city. Once settled, members of these
shantytowns petitioned municipal governments for public ser-
vices, but extending services to highly elevated geographies
was technically difficult and costly. Therefore, the water ser-
vices these working class settlements received prior to 1997
was irregular and of poor quality (Interview #75). There was
an understanding between PRI authorities and poor neighbor-
hoods that water prices would remain low, and collection of
user fees would be flexible. Also subsidized, “residential”
neighborhoods were middle class zones that had been incorpo-
rated during the original urban planning process; middle class
groups had better, and less irregular, water service before cost
recovery initiatives began. After services were decentralized
in 1992, PRI mayors were disinclined to implement cost
22 WORLD DEVELOPMENT
recovery, particularly given the reliance of PRI authorities on
political support from consumers receiving subsidized water,
and by 1997, the water utility was bankrupt (Gaceta Munici-
pal, 1997).
(i) Political challenges of cost recovery
The historic election of a center-right PAN mayor, José
Durán Reveles, in 1997 spurred the introduction of cost recov-
ery reforms. The PAN considered Naucalpan to be a key vic-
tory because its socioeconomic makeup—with relatively high
levels of literacy and white-collar employment—had some of
the highest socioeconomic indicators in the state and mirrored
the conservative party’s constituent base (Conde Bonfil, 1996,
p. 336; Hernández Corrochano, 2003, pp. 445–446). The rela-
tively wealthier makeup of the city could be an important
source of support for cost recovery. Another source of support
was the city’s industrial and business community who had pre-
viously been underserved by the water utility, being asked to
help finance flood controls and improve deficient drainage sys-
tems in their industrial parks (Reforma, 1996a, 1996b). Indus-
try accounts for 57% of the municipal economy, the majority
of which depend on reliable water service for their manufac-
turing. 28 By 2008, 1,313 industries were registered clients of
the water utility (OAPAS, 2008a). Water reliant industries
constituted a critical mass of clients that had previously been
subsidized, but underserved by deficient water service under
the PRI. The PAN could consolidate substantial middle class
and industrial support by improving services for a constituent
base of higher income groups that would be less likely to no-
tice price increases, especially if service improvements were
quickly forthcoming and targeted to these higher income res-
idential areas and industrial parks.
In 1998, Mayor Durán led the water utility in subsidies elim-
ination for all consumer groups, tracking and eliminating
clandestine connections, and threatening service suspensions
for non-payment. The PAN-led city council voted to eliminate
“Acuerdo 10,” an agreement for highly subsidized water prices
that PRI leaders had previously signed with 82 working class
neighborhoods, and when repealed would represent an over-
night price increase of as much as 266% for the irregular, poor
quality water service they were receiving (Reforma, 1998a,
1998b).
Urban protest was immediate and widespread. Neighbor-
hood association leaders from working class neighbor-
hoods—led by opposition PRI and PRD leaders
representing 82 neighborhoods and 75,000 families—orga-
nized three marches in March 1998 that shut down major
thoroughfares and threatened to March to the state’s capital
city. After several appeals to the PAN administration went
unheard, protest groups began to make widely publicized
“symbolic payments” to city hall for their water bill. This
symbolic gesture suggested consumers were willing to pay
for water received (Reforma, 1998i). One protestor explained:
“[We] are inclined to pay, but the amount being charged is
disproportionate; we are suggesting an increase of 30%. . .
we receive water every third day, for barely three or four
hours, and sometimes it does not come until 11 pm” (Ref-
orma, 1998b). Opposition parties used water price increases
as a referendum on the first ever PAN administration in
the city, calling for Durán’s resignation and associating these
measures with anti-poor policies (Gaceta, 2001, p. 33; Ref-
orma, 1998c). Protestors claimed “viewing citizen’s payment
as revenues for a business is totally absurd” (Reforma,
1998g). These initial protests culminated in an opposition
led month long occupation of the municipal palace, leading
to multiple arrests and disbandment by police (Reforma,
1998f, 1998h). After extensive negotiations with neighbor-
hood association leaders, functionaries lowered the initial
price increases by 20%, but insisted on continuing to imple-
ment cost recovery measures (Reforma, 1998g, 1998d, 1998e).
After Mayor Durán left office, subsequent mayors adopted
similar “pressure valves” to mitigate social backlash. For
example, mayors reinstated a 10% discount if paying in the
beginning of the year, and created a highly subsidized con-
sumer block for consumers with intermittent service (popular
tandeado). Periodic protest over price increases continued,
with mediation through neighborhood association leaders.
The only public forums undertaken by the water utility during
this period occurred in 2001 and 2002 (Gaceta, 2001, 2002;
Reforma, 2001a), but were open only to neighborhood associ-
ation leaders (Gaceta, 2002, p. 19). City hall viewed direct civic
participation through “town hall meeting” style forums as too
socially disruptive given the contentiousness of tariff increases
(Interview #151). Although some resistance from the urban
poor continued (Reforma, 2000, 2004), organized protest
waned over time and was less intense in future administra-
tions.
PAN leaders implemented a series of concessions that were
ad hoc and improvisational in both content and timing. For
example, functionaries provided some discounts in the begin-
ning of the year for all consumers, instituted debt forgiveness
programs, and chose to not install meters in irregular settle-
ments (Milenio, 2009a; Reforma, 1999; Interview #151). De-
spite the PAN’s original intention to undertake a complete
cost recovery process, reforms were only possible through ad
hoc negotiations and flashy inducements (such as raffling cars
and household appliances to induce on time payment) rather
than programmatic changes that could both sustain income
generation for the water utility and protect the most vulnera-
ble consumer. While revenues have dramatically increased
since the mid 1990s, the city continues to struggle with solicit-
ing payment and recovering debts from consumers (Reforma,
2008; Universal, 2008, 2009a).
(ii) Overcoming administrative challenges and constructing
policy continuity
Hiring and retaining qualified policymakers and implement-
ers over time is very challenging in Mexican municipal govern-
ment. Durán was able to circumvent some of the systemic
institutional constraints at the local level through informal net-
works of personnel retention. Although Durán could not run
for immediate re-election as mayor of Naucalpan, he was able
to ensure personnel continuity. And as a PAN party leader, he
supported PAN mayoral candidates who would be sympa-
thetic to his reform agenda. The mayor from 2000 to 2003,
Eduardo Alfredo Contreras, was Durán’s secretariat in the
1997–2000 administration, and the 2003–2006 Mayor, Angel-
ica Moya Marin, had been part of Durán’s inner circle. In fact,
many of the local city hall appointments during this time were
PAN loyalists “recycled” from prior administrations (Ref-
orma, 2003). For example, the water utility’s general director
from 2006 to 2009, Manuel Gómez Morı́n was a party loyalist
(the grandson of the PAN’s founder by the same name) and
had worked in Durán’s first administration (Interview #36).
Finally, Durán became mayor again in 2006, continuing a re-
form agenda he had begun in 1997. The institutional con-
straints endemic to municipal government were partially
overcome by Durán’s ability to remain influential in the poli-
cymaking process over time, a strategy that relies exclusively
on informal and ad hoc arrangements, and may be difficult
to replicate or sustain when the original spear header is no
longer present.
 EVIDENCE FROM MEXICO’S URBAN WATER AND SANITATION SECTOR
(iii) Operationalizing service improvements
Naucalpan was able to generate revenue to reinvest back
into improving service. Naucalpan’s sizeable number of indus-
tries and middle class communities allowed for increased rev-
enue generation from high volume consumers, much of which
was reinvested back into these communities. 29 These mea-
sures allowed for highly visible service improvements that
when well advertised, were important electoral tools for the
PAN and Mayor Durán’s continued political success. 30
In 1997, Naucalpan pledged $MXP 75 million in hydraulic
construction (Reforma, 1997b). Many aspects of service provi-
sion were modernized, including the introduction of auto-
mated water extraction readings (macromedición) and
updating network infrastructure maps. The water utility initi-
ated wide-scale pipe replacements and leak detection units in
order to reduce the amount of lost water (Interview #62).
One respondent explains that “we began to function like a pri-
vate company, and we began to reinvest all of the revenues. . .
[in the] water utility” (Interview #75).
The PAN’s marketing campaign became quite sophisticated
by the 2006–2009 administration. The water utility developed
a mascot, a branded logo, and pricing comparatives pitting
water prices against the more expensive cost of common every-
day items, including other utilities (OAPAS, 2008c). They
carefully advertised and labeled construction projects as being
funded by user fees, and emphasized the connection between
increased fees and improved services (OAPAS, 2008d).
Because policy consolidation from 1997 to 2000 was
achieved through informal mechanisms, ongoing reform is
far from set in stone in Naucalpan. In 2009, the PRI won in
Naucalpan, and the water utility replaced all PAN loyalists
with PRI members, many of whom had no prior experience
with commercialization practices or simple accounting (Inter-
view #151). The 2009–2012 PRI mayor, Azucena Olivares Vil-
lagomez, upon entering office claimed that there was public
dissatisfaction with prices many perceived to be too high
(Milenio, 2009b). It remains unclear whether alteration of
power between competing political parties will be conducive
to continuing to implement commercialization in Naucalpan.
(b) Incomplete commercialization and ad hoc service
improvements: Toluca
Toluca is the capital city of Mexico State, and is home to a
disparate mix of users that draw from the city’s increasingly
limited water resources. For example, industrial consumers
with their own boreholes extract 30% of local supply (Milenio,
2007). As of 2008, 30% of the water utility’s water sources
were used by peri-urban and rural residents that managed
their own water supply due to preexisting legal arrangements
with the state government (AYS, 2008a, p. 1). In addition,
the capital city provides services to as many as 1,100 public
institutions such as schools, hospitals, and government offices,
which are also exempt from water payment (Milenio, 2008c).
Because of the high amount of “non-billable” users of the ci-
ty’s water resources, as well as the low amount of industrial
consumers reliant on the utility, cost recovery has been more
of an uphill battle for Toluca’s PAN mayors, despite their
shared “technocratic” and business oriented ideology. The
limited amount of service improvements Toluca’s water utility
undertook were due largely to technocratic changes that side-
stepped the adoption of politically controversial policies.
(i) Political challenges of cost recovery
Toluca’s water utility has updated tariffs with support from
the state government and implemented performance-monitor-
23
ing programs (Interview #63). Functionaries admit that de-
spite the formal adoption of these practices, political
considerations remain relevant. For example, during elections,
the government must consider how much the party’s constitu-
ents can afford to pay (Interview #35), and in electoral cam-
paigns mayors promise water infrastructure construction for
their constituencies that utilities are then pressured to deliver
(Interviews #35, 41, 45).
Mayors have been unwilling to support stringent collection
practices. By 2008, only 7.5% of users in Toluca had meters in-
stalled, as compared with Naucalpan’s rate of 52% (AYS,
2008b; OAPAS, 2008a). Mayors have hesitated to pursue
large-scale meter installation due to fear of social backlash.
Functionaries also worried that the cost of meter installations
would be unrecoverable in poor neighborhoods (Interviews
#42, 43). While some service suspensions for non-payment
were begun in 2008, for years suspension policies were lax, de-
spite water laws that permitted cut-off for non-payment. In-
stead, functionaries have relied on “ad hoc” measures to
generate revenues, such as debt forgiveness programs that gen-
erate some revenue but are far from cost recovery (Reforma,
2001b). The water utility has the legal authority to seize con-
sumer’s property if they do not pay, but lawyers contracted
to exercise legal action against non-paying customers have
only begun some action since 2008 (Milenio, 2008a; Interview
#154), and it is unclear whether legal sanctions would be pur-
sued by future mayors. Similar to many cities attempting cost
recovery in Mexico, Toluca has a high amount of payment
evasion (50% of its consumer base owes payment from prior
years), and many people are paying tariffs that do not corre-
spond to the amount being consumed (Milenio, 2008b, 2009e).
Mayors intervene regularly in water services delivery in Tol-
uca. Politicians campaign on the issue of guaranteeing water
for the future; for example Mayor Sánchez (2006–2009) fa-
mously campaigned—and later failed to deliver on—guaran-
teeing water for the next twenty years (Milenio, 2009d). All
three mayors, particularly Mayor Sánchez, participated in
multiple photo opportunities advertising high profile works
(Sol de Toluca, 2007, 2008b, 2008c, 2008d). Mayor Sánchez’s
team worked closely with the water utility’s public relations
department to ensure that the mayor received press coverage
for hydraulic projects (Interview #49). Some functionaries
note that recent campaign promise of “water for the next
twenty years” without willingness to shoulder political burden
of increasing prices is similar to the PRI’s historic promise of
free water. Functionaries also complain of having to provide
water for local committees outside of the water utility’s juris-
diction because they represent votes for the mayor (Interview
#53).
(ii) Administrative challenges and lack of policy continuity
The PAN’s historic win in Toluca in 2000 brought in a series
of mayors who paid lip service to hydraulic issues but did not
take on sweeping reforms. The first PAN mayor, Juan Carlos
Nuñéz Armas (2000–2003) had prior hydraulic experience as
former president of the state Aquifer and National Resources
Commission and participated in the drafting of Mexico’s State
Water Law. During his term, Toluca became involved in the
state’s water tariffs working group, and city hall supported
the water utility through fiscal transfers for infrastructure con-
struction at a consistently much greater level than the subse-
quent two mayors. 31 However, Mayor Nuñéz Armas
focused more on building new hydraulic works than imple-
menting maintenance or cost recovery. The following two
PAN mayors, Armando Enrı́quez Flores (2000–2006) and
Juan Rodolfo Sánchez Gómez (2006–2009), also failed to
24 WORLD DEVELOPMENT
implement cost recovery. Instead they focused on more gen-
eral large public works projects in other sectors, the latter
mayor famously beginning a series of expensive and high pro-
file modifications to the downtown historic area that were left
uncompleted (Sol de Toluca, 2008a).
Despite the same party maintaining power for three admin-
istrations, administrators changed continually due to patron-
age appointments. Both city council members and mayors
distributed positions to their inner circle or based on campaign
promises. As one functionary noted, “here in local government
we say that we are born again every day. When I come to
work, I have to check to see if there is someone else in my
chair, if not. . .then I know I still have a job” (Interview
#35). Functionaries admitted that projects stalled with new
administrative changes because employees were worried about
losing their jobs (Interview #35). By the time the PAN left Tol-
uca in 2009, their administrations were accused of mishandling
public funds and increasing public debt to finance unnecessary
public works projects that were never completed (Sol de
Toluca, 2009).
(iii) Ad-hoc service improvements
Toluca’s partial amount of service improvements focused on
accessing some revenues from the federal government for
infrastructure development but largely sidestepped the adop-
tion of politically controversial commercialization policies.
The general manager, Mauricio Ramı́rez Rosaldo (2000–
2006) was controlled by mayors who allowed for some opera-
tional autonomy as long as the mayor’s political commitments
were respected (Interview #35). He tracked performance indi-
cators that made the water utility eligible for federal financing
for infrastructure updates. During the 2000–2008 period, the
water utility’s general construction budget increased by
400% (AYS, 2008c). However, it remains unclear whether
adopting the tracking of performance indicators has actually
helped service improvements or just been a vehicle to access
federal infrastructure funds.
Toluca’s network infrastructure is antiquated, has outdated
network maps, and high amounts of lost water through pipes.
The network infrastructure is as old as sixty years in some
areas, and approximately 75% of it is in dire conditions, losing
up to 45% of conducted water daily (Milenio, 2009c). While
Toluca’s water utility has found it difficult to increase their ser-
vice coverage and service continuity, support from federal pro-
grams has led to some improvements (Interview #43). As of
2013, Toluca’s water utility was not treating its wastewater
(GMT, 2012).
(c) No commercialization and deteriorating services:
Nezahualcóyotl
Ciudad Nezahualcóytl, also known as Neza, has over
1.1 million inhabitants and ranks as Mexico’s fourth largest
city. Neza began as a poor “bedroom community” when rural
migrants flocking to work in Mexico City found more afford-
able housing in its nearby outskirts. Most residents of the city
did not have land titles upon settling in the 1960s, but instead
lived in informal squatter settlements with no public services
(Selee, 2011, pp. 132–144). By 2000, almost all properties in
Neza had electricity, water, and sewerage, but despite an offi-
cial 97% water coverage rate (INEGI, 2010), Neza’s water ser-
vices are highly deficient. Neza’s water utility was
administered as a public works department before becoming
a legally autonomous decentralized water utility in 1993. Since
decentralization, Neza has found it difficult to introduce cost
recovery, under first the PRI party and later the left of center
PRD.
(i) Political challenges of cost recovery
Despite some price increases led by a statewide initiative in
2002, commercialization practices remain practically non-exis-
tent. Local leaders do not consider cut off of service for non-
payment a politically viable option. Functionaries admit that
consumers are so resistant to pay for the poor quality service
they receive that the billing office has stopped issuing water
bills and simply rely on consumers initiating payment if they
are so inclined (Interview #70). Neza’s collection policies are
purposefully casual: the water utility does not have to spend
time or manpower issuing bills, tracking revenues, or demand-
ing payment. In order to generate some operating revenue, the
municipality issues bi-monthly “debt forgiveness” programs
that culminate in a large subsidy (often over 50%) around
the Christmas holidays. Additionally, all seniors receive 50%
discounts, and consumers who pay in the first two months
of the year receive further discounts. Because of the many sub-
sidies administered directly by the municipality, the water util-
ity admits that few consumers would choose to pay their bill
during non-discounted months. Small and medium sized busi-
nesses and higher income users also do not receive water bills
(Interview #70).
The Neza case study underscores patterns of inefficiency,
corruption, and unresponsive local government found in many
urban W&S systems. A number of influential actors within the
service provision process have benefited from maintaining dis-
cretionary practices. First, the mayor and water utility director
receive side-payments from the repair of refurbished parts
(e.g., electricity generators) (Interview #73). Therefore, the
mayor and his colleagues are not interested in purchasing nec-
essary new generators, vehicles, and other hardware because
they profit from the side-business of repairing continually defi-
cient hardware. Second, because Neza’s water utility has little
control over their water supply and because workers are
underpaid, operations workers may sell water access, or re-
pairs to the system without any fear of recrimination (Univer-
sal, 2005). Third, bill collectors may also pocket some revenues
when they collect consumer payment because the process is
not automated or regulated. Fourth, because the mayor di-
rectly controls the water utility unchecked, water revenues
may be diverted to other purposes. 32 Finally, service suspen-
sions are discretionarily administered: one water utility direc-
tor who initially insisted that service suspension is not viable
because water was a human right later revealed that he orders
suspension as retributions against those with whom he has
personal or political disputes (Interview #71).
(ii) Administrative challenges and benefits of “discretion”
The city government’s ability to improve services is also
highly affected by staffing and human resources problems.
Undereducated and poorly trained civil servants are common
both because of the lack of a municipal-level civil service as
well as the mayor’s use of positions in exchange for political
support. In addition, despite four consecutive left-of-center
PRD administrations (1997–2009), local government in Neza
has been tumultuous during this time, with four elected
mayors and three interim mayors (GMN, 2009). As Board
presidents, mayors single-handedly appoint the utility’s
general manager; these positions have routinely been used as
patronage appointments for party loyalists. Of the last four
appointed general managers’, half have been replaced mid-
season. While two have been engineers, Juan Herrera Moro
(1997–2000), and Juan Martin Bolaños Vela (2003–3006),
 EVIDENCE FROM MEXICO’S URBAN WATER AND SANITATION SECTOR
others have had a primary or secondary education and no
prior professional experience in the sector.
(iii) Services deterioration and public apathy
Because of Neza’s inability to generate internal revenues,
infrastructure development have stalled, operations and main-
tenance have been neglected, and the city’s residents experi-
ence ever worsening service quality (CISA, 2007, pp. 24–28).
Two commonly cited service problems are low availability of
potable water and the ongoing flooding that occurs through
the rainy season given the lack of suitable rainwater drainage
systems. The network infrastructure has received few upgrades
since it was constructed in the early 1970s (Jornada, 1997).
Over half of the water that enters the network is lost through
leaks and clandestine connections. Furthermore, the anti-
quated piped network leaks toxic materials from the pipes that
routinely enter the water supply; it is common to see “yellow
sludge” when opening the tap. Between the large amount of
leaks and low water pressure throughout the grid, many con-
sumers receive virtually no water despite being “officially” cov-
ered by the utility (Interviews #72, 68). Because functionaries
do not have an updated map of the network infrastructure,
they are unable to even create a service-rationing schedule
(tandeo) that would provide service in hourly increments to
different neighborhoods. The water utility has had to resort
to manual water provision: trucks with tanked water (piperos)
respond to some of the thousands of daily complaints of water
shortage (Interview #69).
Such poor service delivery generates a great deal of public
dissatisfaction, yet citizens have become accustomed to sub-
standard service and unresponsive government. For example,
periodically, portions of the city’s water supply are shut down
due to ruptures within the network or even failure to pay the
electricity bill (Jornada, 2007, 2008, 2010; Reforma, 1997a,
1998j; Universal, 2006a). During the rainy season, the many
high flood zones are inundated with flooding, or worse—sew-
age that threatens to flood the city. Because Neza’s sewage dis-
posal system runs on electricity but has no back-up generators,
power shortages and torrential rains makes sewage flooding a
periodic threat (Reforma, 2005; Universal, 2002a, 2002b,
2003, 2006b). These service failures are socially disruptive
and can induce intense dissatisfaction; consumers make
2000–3000 complaints daily, some even threatening violent ac-
tion (Interview #69). Yet these types of isolated complaints,
however explosive, have not culminated in organized collective
action. Rather, many customers have stopped attempting to
reach the water utility because they do not feel that their com-
plaints result in improved service (Interview #69). Years of
poor service quality have resulted in low citizen expectations
regarding service quality.
(d) Cases overview
Enforcing cost recovery has been politically unattractive for
left of center PRD mayors presiding over large numbers of ur-
ban poor residents in Neza and elsewhere. Instead, PRD may-
ors have replicated the “vicious cycle” of poor quality services
for little fees that PRI officials used during the centralization
era. While services were also politicized under centralization,
federal funds were periodically injected into systems in an ad
hoc manner to keep them afloat, a practice local governments
can no longer rely on. Centralization in Mexico coincided with
a period of semi-authoritarian one-party rule, where local
leaders were interested in social harmony but did not have
to win elections. In the context of electoral competition, cities
with a large number of urban poor residents have found
25
maintaining the status quo to be less destabilizing than adopt-
ing politically contentious cost recovery policies.
In all three cases, mayors found it politically challenging to
adopt cost recovery policies after decentralization. A range of
constituents, especially the urban poor, represented a potential
source of public backlash that could be socially disruptive, and
cities without a strong middle class and industrial base of cli-
ents were less likely to find cost recovery a viable financing
strategy for sector reform. While cost recovery represented a
politically contentious policy for all mayors, Naucalpan’s
Mayor Durán was more inclined to adopt commercialization
policies because of the city’s relatively wealthier user groups,
and he was able to appease urban poor protestors by imple-
menting ad hoc concessions that allowed him to pass his re-
form agenda. While innovative mayoral leadership—that
requires savvy use of informal and ad hoc strategies to extend
the short time horizon—may occasionally be able to circum-
vent poor institutional design, these instances are rare. Better
aligning decentralization design to the local conditions and
political incentives for reform will increase the likelihood that
more local politicians invest in public services reform.
6. CONCLUSION
Decentralization has reinvigorated scholarly debate about
what constitutes “good” local government and how to achieve
it. The need for effective local government is especially press-
ing in sectors where infrastructure is in disrepair and in need
of expensive and technically complex updates. The effective-
ness of local government has important implications beyond
the local level. The ability of local politicians to successfully
improve services provision, enforce environmental regulations,
and provide social benefits to citizens determines whether
important development objectives are furthered.
While local politicians play an increasingly key role in devel-
opment outcomes, the factors that lead to effective local gov-
ernment continue to be contested. Prior accounts have
focused on the importance of participation, citizen account-
ability, and innovative mayoral leadership for local govern-
ment effectiveness. I argue that while mayoral innovation
and participation are important factors, they may be con-
strained by the poor fit between the decentralization design
and the local context in which decentralization strategies are
carried out. In Mexico, decentralization was part of a broader
neoliberal reform package that failed to consider the unique
constraints of local government. Commercialization policies
created political disincentives for reform adoption, especially
in poor communities and in communities where services
needed major capital investment before price increases could
be applied. Contentious commercialization policies were made
more difficult to implement because of institutional constraints
in local government that shortened the policymaking window,
a particularly pressing problem in areas such as W&S that
necessitate long-term planning.
I argue that neoliberal policies such as commercialization
have undermined potential gains of decentralization and failed
to improve services systematically in Mexico. Alongside na-
tional averages that do not suggest considerable service
improvements in the last decade, field research reveals a litany
of service problems and under-financed utilities. An unfortu-
nate paradox arises: while Mexico has reached the 2015 UN
Millennium Development Goals to halve the population with-
out access to piped water (CNA, 2012, p. 32), it has also be-
come the world’s largest consumer of bottled water (IADB,
2010).
26 WORLD DEVELOPMENT
International agencies have emphasized the need for auton-
omy in urban water management; decreasing mayoral inter-
vention was seen as a means to improve local services and
widely promoted. My study shows that decreasing mayoral
intervention after decentralization may not be feasible, or
desirable. In weak and short-term institutional contexts, effec-
tive policymaking may rely on informal networks and coali-
tion building, something that mayors are in a better position
to do than appointed bureaucrats who wield less authority.
Institutional autonomy may also compromise citizen account-
ability; technocrats are much more easily isolated from citizen
demands than elected officials.
The Naucalpan case suggests that relatively successful re-
form under the current “rules” of the game favor rich cities
with strong industrial and middle class bases and politicians
who cater to these constituent groups. This is not surprising,
given that fiscal self-sufficiency requires a customer base that
can generate sufficient revenue to finance service improve-
ments. Even in these cases, however, the institutional con-
straints of local government make the likelihood of policy
reversal after reformers leave office high. Furthermore, the
promise of increased participation after decentralization was
not realized in the context of self-financing reforms, as mayors
in Naucalpan consistently limited the use of public and delib-
erative forums while implementing commercialization.
The broader neoliberal reform package in W&S amounted
to a “retreat of the state,” one that not only eliminated subsi-
dies for maintenance, but also reduced the oversight role of the
federal government in service provision. Given the emphasis
on performance based financing, elimination of federal grants
and fiscal self-sufficiency, the onus for service improvement
has been left to the market: consumer fees are expected to
do the heavy lifting for improving service in urban centers.
But is this a reasonable expectation, especially given the insti-
tutional constraints of municipal government and internal rev-
enue generation policies as currently designed?
Urban W&S management would benefit from comprehen-
sive measures designed to help mitigate social backlash against
cost recovery. For example, a federal initiative to study
NOTES
1. Multilateral agencies, influenced by fiscal federalism theory (Oates,
1972; Tiebout, 1956), reasoned that administrative decentralization to
local governments would improve service provision through stakeholder
participation in decision-making and better matching of service to local
needs (Bird, 1994, p. 8; W.F. Fox, 1994, p. 23; Silverman, 1992, pp. 12–13;
World Bank., 1994, p. 76).
2. See Speer (2012), Goldfrank (2011), pp. 11–33) and Blair (2000), pp.
23–24) for further discussion of how decentralization and participation
may lead to improved government performance, responsiveness, and
accountability.
3. I define decentralization as a transfer of authority from the central
government to a subnational unit of government and therefore do not
consider transfers of service responsibility to the private sector a form of
decentralization (in contrast to some analysts, for example, see Cheema
and Rondinelli (2007, p. 7)). I concur with definitions of decentralization
that identify three types of decentralization: political, administrative, and
fiscal (Falleti, 2010; Montero & Samuels, 2004). As such, W&S
decentralization is an example of administrative decentralization, where
the responsibility for services provision is transferred from national
governments to subnational governments. I do not consider deconcentra-
tion a form of decentralization because this often refers to a transfer of
whether, and how, to best implement a targeted subsidy in
the sector would be a positive first step: subsidies could be tar-
geted by means or geography, and/or a connection subsidy.
These mechanisms would help to more accurately identify con-
sumers’ ability to pay, providing “lifelines” for the poorest
consumers and “un-subsidizing” the non-poor. 33 Targeted
subsidies would also help to offset the regressive nature of
increasing block tariffs as currently implemented in Mexico,
where the first broad lifeline consumption is often so large that
it captures most domestic users, even those with the ability to
pay (World Bank, 2005, p. 30). While there are many examples
of these types of programs in other middle income countries
(Gómez-Lobo & Contreras, 2003), there is no such national
program in Mexico. In addition, initial injections of infrastruc-
ture updates from the federal government—not linked to per-
formance—would have a dual benefit: user fees could be more
quickly translated into visible service improvements because
the initial (costly) groundwork would already be laid, and
also, consumers may be less hostile toward price increases if
services are concurrently visibly improving.
Finally, if federal and state governments played a greater
role in supporting urban utilities, they could help extend the
time horizon of local policymaking. For example, the CNA
could promote the creation of more inter-municipal utilities
for cities that alone do not constitute a sufficient, or profitable,
economy of scale to fund improvements through cost recov-
ery. The better performing utilities, for example, cities in the
states of Nuevo Leon or Querétaro, are often state-level oper-
ators with important economies of scale, technical proficien-
cies, a civil service, and a longer state government
administration, six rather than three years. In addition, federal
or state level regulatory bodies could be created to oversee ur-
ban services. These bodies could help regulate investments,
administer targeted subsidies, collect performance data, pro-
vide technical assistance, and promote environmental preser-
vation. 34 These types of interventions would require greater
financial investment by the federal government in sectoral
organization and oversight, but would help to make better
use of the funds currently being spent in the sector.
services responsibility from a central agency to a regional field office,
where services responsibility remains under the auspices of the federal
government.
4. For further reading on decentralization in Mexico, see Grindle (2007),
Mizrahi (2004), Rodriguez (1997), and Selee (2011).
5. I thank an anonymous reviewer for making this observation.
6. For example, cities in Mexico State have all received the responsibility
for W&S provision through decentralization in the early 1990s (GEM,
1997), are governed by similar fiscal and administrative policies admin-
istered by the Mexico State Water Commission, and these three cities
selected rely on water from the Cutzamala Dam administered by the
Mexico State Water Commission (CNA, 2006, p. 79).
7. Eaton, Kaiser, and Smoke (2011) argue that different bureaucracies
within multiple tiers of government have varying, and at times conflicting,
preferences that makes coordination in policymaking after decentraliza-
tion particularly challenging.
8. See Speer (2012) for a review of this literature.
 EVIDENCE FROM MEXICO’S URBAN WATER AND SANITATION SECTOR
9. NPM has also been referred to as “post bureaucratic paradigm,”
“managerialism,” “market-based administration,” and “entrepreneurial
government.”
10. A related reform has been promoted, called corporatization, for the
public sector. Corporatization can occur by incorporating public entities
under a (Public) Corporations Act, or creating “ring-fenced,” public
companies or organizations, which are legally, fiscally, and administra-
tively independent. In Mexico, the latter occurred in the urban W&S
sector.
11. Weak institutional capacity at the local level is not unique to
developing countries. Sellers and Lidström (2007) conceptualize several of
the institutional constraints discussed in this article (such as term limits
and the presence of civil service) as dimensions of institutional capacity
and document the pervasiveness of low institutional capacity even in
developed countries.
12. For a list of prohibitions on re-election in Latin America, see Zovatto
(2011).
13. See Aboites (1998) for a description of this period.
14. While neither reform has been a “one-shot” deal but instead has
taken place over a period of time, decentralization efforts generally
preceded attempts to implement commercialization practices.
15. Three World Bank loans during 1975–1983 were instrumental in
shaping subsector policymaking, known together as FIFAPA (the
Investment Fund for Water Supply and Sewerage Works). FIFAPA
created autonomous utilities in 33 cities and introduced the concept of
financing systems through user charges, an initiative that unearthed the
systemic challenges in raising water prices and the complex politics of
creating autonomous utilities under municipal jurisdictions (Dau Flores,
2008, p. 113; World Bank, 1992, p. 58).
16. See CNA (1993) and CNA (2003) for examples of promotion of PSP,
made legally permissable after the passing of the National Water Law
(Estados Unidos Mexicanos, 1992). For a discussion of privatization of
W&S in Mexico, see Wilder and Romero Lankao (2006), Pineda Pablos
(2002) and Barocio and Saavedra (2004). Promotion of PSP in urban W&S
has waned since the 1990s, although CNA continues to promote private
capital investment in wastewater treatment plants (Interviews #17, 26).
17. Although reform architects’ original intention was to decentralize all
urban utilities to the municipal level, several state governments (Nuevo León,
Tabasco, Querétaro, and Chihuahua) chose to not decentralize further, while
others chose to sponsor inter-municipal utilities. Over time, APAZU rules
changed to accommodate these additional arrangements and state govern-
ments were also able to utilize APAZU funds for their urban utilities.
18. Five are state level operators (Nuevo León, Tabasco, Querétaro,
Chihuahua, and Distrito Federal), approximately 10 are inter-municipal
(San Luis Potosı́, Guadalajara, Colima, Zacatecas, Pachuca, Monclava,
Oaxaca, Apizaco, Veracruz, and Mérida), and the remaining are
municipal operators. (Author correspondence with National Water
Commission, April 2, 2012; INEGI (2009, p. 9)).
19. I thank an anonymous reviewer for this suggestion.
20. Multiple author interviews revealed that utilities typically have three
versions of performance indicators: one version for the CNA, one version
for fiscal auditors, and the “real” numbers. In particularly deficient utilities,
functionaries may not have the resources to measure performance at all.
27
21. High non-revenue water and low physical efficiency are proxy
measures that reflect the condition of the piped network infrastructure and
the amount of freshwater that is being wasted and contributing to the over
extraction of underground aquifers, but also are correlated with other
types of service quality measures, such as low water pressure in homes and
high service intermittency.
22. These figures put Mexico well below the average of best performing
utilities in developing countries, which reach levels closer to 23% of non-
revenue water (World Bank, 2005, p. 28).
23. For example, one ex-mayor and ex-water utility citizen board
president in a Guanajuato city noted in 2012 that, “Those of us who
work in the water sector hide the issue of water quality. [For example,] you
have an underground aquifer that emits an enormous amount of arsenic,
and [we] mix it with water from another aquifer that has less arsenic, so
that it will ‘just barely’ pass the [water quality standards]” (Interview #
170).
24. The CNA reports that from 1990 to 2009, the childhood mortality
rate due to diarrheal disease has decreased, from 122.7 (for every 100,000
inhabitants) to 11.8 (for every 100, inhabitants) (CNA, 2011, p. 102).
However, while water coverage during this time has increased from 78.4 to
90.8%, other nation-wide programs were implemented nearly simulta-
neously that likely impacted the instance of waterborne illness, such as a
vaccination program (begun in 1986), and a program of distributing
electrolytes solution (suero oral) to combat dehydration and diarrhea
(begun in 1984). Even the CNA’s reported data suggest that it is difficult to
tease out the causal impact of increasing water coverage, as opposed to
other programs such as the two just mentioned, on decreasing waterborne
illness (CNA, 2011a, p. 102).
25. Therefore, it is quite possible that any gains that have been made in
decreasing water-borne illness have been made due to widespread “opting
out” of the municipal water supply and extensive increases in bottled
water use.
26. World Bank analysis of Mexico’s internal revenue generation
confirms a low amount of revenue generated by water utilities in Mexico,
“the sector generates only a very modest cash surplus, which is well below
the performance achieved by the top quartile of utilities in developing
countries” (World Bank, 2005, p. 30).
27. The CNA annually publishes figures for a sample of utilities that
submitted what appeared to be “credible” performance indicators.
However, the data are presented by indicator type (due to the amount
of missing data) rather than in consolidated tables that allow for easy
comparison across cities. Therefore, I composed a chart of performance
indicators across a range of cities that had the most data available.
28. For example, water-intensive industries such as chemicals, paper/
pulp processing, metallics, clothing manufacturing, electronics, and food
production all account for 46% of the municipal economy, and generate
approximately $MXP 32.2 million per year (INEGI, 2004).
29. Service-rationing schedules indicate that middle class neighborhoods
and industrial parks received non-intermittent service by 2008 (OAPAS,
2008b).
30. Mayor Durán became PAN candidate for state governor in 1999
after leaving the Naucalpan mayorship, subsecretariat within the state
government from 2000 to 2005, mayor of Naucalpan again in 2006, and
remained a key candidate for the PAN governorship nomination after
leaving mayoral office in 2009.
28 WORLD DEVELOPMENT
31. Ramo 33 is a federal transfer to municipalities that can be used by
municipalities for a large number of projects, according to priorities within
city hall. During the Nuñéz 2000–2003 administration, the water utility
received $41,853,524 mxp million from Ramo 33, much higher than the
$6,960,153 mxp million received during the Enrı́quez 2003–2006 admin-
istration, and the $7,826,086 received by 2008 during the Sanchez 2006–
2009 administration (AYS, 2008c).
32. See Davis (2004) for an analysis of corruption in W&S systems.
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 EVIDENCE FROM MEXICO’S URBAN WATER AND SANITATION SECTOR 31

Weitz-Shapiro, R. (2008). The local connection local government perfor- APPENDIX B. WATER AND SANITATION COVERAGE
mance and satisfaction with democracy in Argentina. Comparative IN MEXICAN STATES
Political Studies, 41(3), 285–308.
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An introduction. In S. Whiteford, & R. Melville (Eds.), Protecting a State Water Sanitation
sacred gift: Water and social change in Mexico (pp. 1–28). La Jolla: coverage (%) coverage (%)
Center for US-Mexican Studies, University of California.
Wilder, M., & Romero Lankao, P. (2006). Paradoxes of decentralization: Aguascalientes 98.80 98.10
Water reform and social implications in Mexico. World Development, Baja California 95.50 93.10
34(11), 1977–1995. Baja California Sur 92.60 93.70
World Bank. (1964). An appraisal of the development program of Mexico: Campeche 90.00 84.90
Volume VII, Annex VI, water supply, sewerage and public health. Chiapas 77.30 81.00
Department of Operations, Western Hemisphere. Washington DC: Chihuahua 94.60 92.10
World Bank.
World Bank. (1975). Report and recommendation to the President (No. P- Coahuila de Zaragoza 98.30 95.40
1727-ME.). Washington DC. Colima 98.60 98.70
World Bank. (1976). Water supply and sewage: Sector study, Mexico (No. Distrito Federal 97.70 99.10
Report no. 1278-ME). Washington, DC: World Bank. Durango 93.90 87.60
World Bank. (1990). Staff appraisal report for loan 3271-ME (No. 8973- Guanajuato 94.40 90.30
ME). Washington, DC: World Bank. Guerrero 69.80 74.00
World Bank. (1992). Project completion report for loan 1186-ME, 1913- Hidalgo 90.70 85.00
ME, 2281-ME (Infrastructure Division, Country Department II, Latin
America and the Caribbean Regional Office No. Report No. 11448).
Jalisco 95.80 97.40
Washington, DC: World Bank. México 94.00 93.60
World Bank. (1994). World development report – Infrastructure for Michoacán 91.60 88.00
development. Washington, DC: World Bank. Morelos 91.50 95.00
World Bank. (2005). Mexico infrastructure public expenditure review Nayarit 92.40 93.10
(IPER). Washington DC: World Bank. Nuevo León 96.60 96.00
Wunsch, J. S. (2001). Decentralization, local governance and “recentral- Oaxaca 76.10 69.20
ization” in Africa. Public Administration and Development, 21(4),
277–288.
Puebla 87.20 86.30
Zovatto, D. (2011). The reelection trend in Latin America. Mundo Querétaro 94.70 90.40
electoral. Retrieved from: <http://www.mundoelectoral.com>. Quintana Roo 92.40 92.70
San Luis Potosı́ 85.50 79.70
Sinaloa 94.70 91.10
Sonora 96.60 89.20
Tabasco 81.20 95.40
Tamaulipas 95.90 86.90
Tlaxcala 98.20 94.50
Veracruz 80.30 82.60
Yucatán 97.20 78.80
Zacatecas 94.30 89.10
National Average 90.90 89.60
Source: CNA (2011a) (based on INEGI XIII Census, 2010).
Note: Percentages and sums do not match to 100 because of rounding.

APPENDIX A. LOAN HISTORY FOR MEXICO’S WATER AND SANITATION SECTOR

Year Loan number Project name Loan amount Federal program

($USD mil) in Mexico
1973 909-ME Mexico City Metropolitan Area Project 90 N/A
1975 1186-ME Medium Cities Water and Sewerage Project 40 FIFAPA 1
1980 1913-ME Second Medium Size Cities Water and Sewerage Project 125 FIFAPA 2
1983 2281-ME Third Medium Size Cities and Sinaloa State Water Project 100.3 FIFAPA 3
1991 3271-ME Water Supply and Sanitation Sector Project 300 APAZU
1992 ME0128* National Investment Program Potable Water 200 APAZU
1994 3751-ME Second Water Supply and Sanitation Sector Project 350 APAZU
2004 N/A Water Supply and Sanitation Technical Assistance Loan 15 N/A
2010 N/A Water Sector Development Policy Loan Project 450 N/A
2010 N/A Water Utilities Efficiency Improvement Project 100 N/A
2010 N/A Water Utilities Efficiency Improvement Project 100 PROME
Sources: Based on author’s calculations from World Bank and Inter-American Development Bank archives.
Note: The World Bank is the co-signor of all loans except for one loan from the Inter-American Development Bank (marked as *).

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