Development Disagreements and Water Privatization: Bridging the Divide By

While trade liberalization was perhaps the archetype disagreement on development strategy in the 1980s and 1990s, in the 1990s and 2000s this role has been taken over by water privatization and the passions it arouses. What are the underlying reasons for disagreements on water, among those who proclaim to be for poverty reduction? This paper tries to understand the nature of the disagreements, and ascribes them to a combination of interpretation of the empirical evidence and, more importantly, differences in world view on how to assess what constitute good development outcomes, and on how to achieve them. It is suggested that the way forward lies in a clear understanding of the basis of disagreements, from which, perhaps, a new consensus can be fashioned on water privatization. * T.H.Lee Professor of World Affairs, International Professor of Applied Economics and Management, Professor of Economics, Cornell University. This paper is based on a talk given to the Cornell Conference on the Ethics of Globalization and Development, September 29-30, 2006.