Abstract
Do foreign private investments (originated through public-private partnerships) improve the Water and Sanitation Sector in developing countries? I synthesize market sympathetic and skeptical arguments by noting that their relative salience depends on the level of corruption in a country. Specifically, I argue that private investments can effectively provide water and sanitation through public-private partnerships if they are adequately governed by the state. When corruption is high, however, private actors will pursue profit maximization over public needs, which leads them to provide water but not adequate sanitation. I test these arguments using a cross-sectional time series of fifty-six non-Organization for Economic Co-operation and Development (OECD) countries from 1991 through 2012.
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