The Debate Over Private Sector Participation, 1990-2010
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ABSTRACT Title of Document: WATER, ACTIVISM, AND THE WORLD BANK: THE DEBATE OVER PRIVATE SECTOR PARTICIPATION, 1990-2010 Karen F. Travis, Doctor of Philosophy, 2011 Directed By: Professor Ken Conca, Department of Government and Politics This dissertation examines the transformation of the World Bank’s agenda for private sector participation in urban water and sanitation utilities in developing countries between 1990-2010. I analyze agenda change at the Bank at the level of international policy and through a case study of Uruguay. The case study of Uruguay examines a successful domestic and transnational activist campaign to reform that country’s constitution to prohibit private sector involvement in the provision of water and sanitation services. I find that a pro-privatization agenda institutionalized in the Bank during the 1990s as a result of convergent interests between donor states, the Bank, and transnational corporations was destabilized by a dynamic interplay of external and internal forces in the 2000s. Transnational activist networks, client states, and transnational corporations in retreat comprised the new configuration of external actors constraining the Bank in the 2000s. Tensions internal to the Bank, between its roles as a financial institution and a knowledge producer, and in relation to its neoliberal ideological orientation, have militated against sustained learning as the Bank has confronted the failure of its agenda. I show the Bank to be only a partial learner, unable to resolve contradictions between its espoused development goals, profit-making imperative, and ideology. Transnational activists’ impact on the Bank occurred primarily through country-level campaigns, not through direct engagement or donor pressure, the main routes through which civil society activists have engaged with the Bank in the past. The case study of Uruguay illustrates the contradiction between ideology and “bottom line” pragmatism within the Bank, as well as the challenges facing activists seeking to construct and implement participatory and equitable models of water service delivery. WATER, ACTIVISM, AND THE WORLD BANK: THE DEBATE OVER PRIVATE SECTOR PARTICIPATION, 1990-2010 By Karen F. Travis Dissertation submitted to the Faculty of the Graduate School of the University of Maryland, College Park in partial fulfillment of the requirements for the degree of Doctor of Philosophy 2011 Advisory Committee: Professor Ken Conca, Chair Professor Roberto Korzeniewicz, Dean’s Representative Professor Virginia Haufler Dr. James Riker Professor Karol Soltan © Copyright by Karen Faye Travis 2011 Acknowledgements I owe an incalculable debt to my Chair, Ken Conca, without whose tacit and direct support this dissertation may have never been completed. I took on the dissertation in mid-life as a working professional; Ken stuck with me during the many years it took to reach the finish line. He is a wonderful intellectual interlocutor who combines respect for his students with a concern for social justice and a great sense of humor. I can count on a few digits the number of educators who have similarly inspired me. I thank the other members of my committee for their willingness to serve, especially given my sparse presence on campus the last several years, and for their helpful feedback. I would have been lost without the absolutely indispensable help of the department’s graduate student administrator, Ann Marie Clark. Among the many water activists and water professionals who generously shared their time and experiences with me, I want to particularly thank Sara Grusky, formerly on the staff of Public Citizen and Food and Water Watch. Sara opened doors for me in the “water justice movement” and made the excellent suggestion of using the Uruguayan water campaign as a case study. She might differ with some of my analysis and conclusions, but there are few people whom I hold in as high esteem as Sara for leading a life that “walks the talk.” I am indebted to my office for allowing me the flexibility to take time off to work on the dissertation, and was delighted by the surprise party my co-workers threw me after my defense. I am especially grateful for the love and support of friends and family who stuck by me during some arduous periods, and cheered me on to the end. ii Table of Contents Acknowledgements ............................................................................................... ii List of Figures.........................................................................................................v List of Tables and Boxes...................................................................................... vi List of Abbreviations and Acronyms ................................................................ vii Chapter 1: Introduction ........................................................................................1 1.1. Research Questions...........................................................................................4 1.2. External Influences on the Bank.......................................................................6 1.3. Internal Influences on the Bank ........................................................................9 1.4. Methodology...................................................................................................10 1.5. Findings...........................................................................................................13 1.6. Roadmap for the Dissertation .........................................................................16 Chapter 2: Explaining Agenda Change in Water Privatization at the World Bank .................................................................................................................20 2.1. Transforming World Bank Agendas: Theory and Practice.............................21 2.2. Transnational Activist Networking Against Water Privatization ...................42 2.3. The Political Economy of Private Sector Participation in Infrastructure .......45 Chapter 3: From Panacea Back to Problem, 1990-2010 ..................................57 3.1. PSP as Panacea: The 1990s, a Decade Free of Doubt ....................................58 3.2. No Magic in Markets: Retreat and Revisionism, 2001-2010 .........................75 3.2.1. The Road to Revisionism: 2001-2003 .............................................75 3.2.2. The Second Generation of Infrastructure Reform, 2003-2006 ........83 3.2.3. Different Tune, Same Dance Partner? Redefining PSP,...................... 2006-2010 ......................................................................................103 Chapter 4: Accounting for Change in the Bank’s Agenda for Privatizing Water and Sanitation Services......................................................................................121 4.1. Theorizing Change at the World Bank .........................................................121 4.2. External Influences: Donor States, Client States, TANs, and TNCs............128 4.3. Internal Influences: Knowledge Production, Neoliberal Ideology, and the Bank qua Bank..................................................................................................143 4.4. A Partial Learner in an “Identity Crisis”.......................................................155 Chapter 5: Transnational Activism Against WSS Privatization........................ 2000-2010 .......................................................................................157 5.1. Introduction...................................................................................................157 iii 5.2. An Efflorescence of Activism: Country-Based Campaigns and TANS, ............ 2000-2005 ................................................................................................162 5.3. Framing Collective Action Against Water Privatization..............................180 5.4. A Shift in the Movement’s Orientation, 2005-2010 .....................................186 5.5. The Influence of the Water Justice Movement on the Bank’s ........................... PSP Agenda.............................................................................................196 5.6. Conclusion ....................................................................................................208 Chapter 6: The Successful Campaign to Reform Uruguay’s Constitution to Prohibit Private Sector Participation in WSS ............................................223 6.1. Introduction...................................................................................................223 Part One 6.2. Statism and Direct Democracy Mechanisms: Historical Factors Underpinning the Constitutional Reform Campaign ......................................................231 6.3. From Concessions to the Constitution: Prelude to the CNDAV...................242 6.4. CNDAV and the National Campaign in Defense of Water and Life,................. 2002-2004...............................................................................................255 Part Two 6.5. Neoliberal Policies and WSS Provision in Uruguay, 1992-2004 .................288 Part Three 6.6. Challenges in the Post-Reform Period, 2004-2009.......................................303 6.6.1. Fissures on the Left........................................................................303 6.6.2. Multinationals Leave, Multilaterals Stay: The IFIs Adapt to a Post-PSP Environment......................................................................311 6.7. Conclusion ....................................................................................................319