Paradoxes of Decentralization: Water Reform and Social Implications in Mexico

— Decentralized governance of water resources is a centerpiece of Mexico’s neoliberal reform strategy. We analyze decentralization based on urban/rural case studies in distinct geographical regions to ascertain whether it is linked to more efficient water management or sustainable use of water resources, and to examine its development implications. We assess whether or not private sector management is related to a more efficient, sustainable, and accountable management of water variety of municipal and private management arrangement in four urban areas. We find that it has not resulted in efficiency or sustainability gains. For agricultural water management, irrigation districts in two case studies benefited from the more democratic participatory management by water users under Mexico’s ‘‘transference’’ strategy, but did not result in greater equity, efficiency or sustainability of water use. We argue that decentralization in the Mexican water sector is context specific, and marked by limited benefits. Privatization is less an instrument aimed at improving efficiency than a channel for preferred treatment for capital accumulation by private entities as well as a legitimized way for the state to transfer the burden of water management to non-state institutions. The creation of new forms of water institutions requires not the retrenchment of the state but rather its involvement to ensure accountability, transparency, equity, and sustainability. 2006 Elsevier Ltd. All rights reserved.