This article reviews the changing perspectives for improving access to water in the slums of developing countries, especially in sub-Saharan Africa. While much of the literature continues to maintain an aversion to state-led urban development policies, there is now increasing emphasis on the importance of informal, small-scale providers and communitarian initiatives, following the many failures of privatisation. The article argues that market-oriented solutions are inappropriate for sub-Saharan African countries where over two-thirds of the urban population live in squatter settlements with multidimensional challenges.

This paper provides a critical analysis of the recent developments in the incomplete contracts theory and its conclusions for privatisation of public services. Drawing upon a case study of management contract for urban water services in Ghana and highlighting the flaws in the theory, the paper argues that contractual incompleteness does not provide a uniform guidance on efficient forms of ownership. We argue that methodological individualism utilised in the theory is particularly ineffective for its application to public services where direct or indirect contractual role of the state cannot be eliminated. The sterility of the theory with respect to political, institutional and distributional context of public service delivery is identified as an important weakness.

critical assessment of transaction cost theory and governance of public services with special reference to water and sanitation', Abstract. This paper aims to provide a critical assessment of Oliver Williamson's work on the choice between public and private governance by focusing on his central proposition that public governance should be considered as an organisation of last resort when all else fails. Our primary argument is that Williamson's work on public governance reflects an underdeveloped framework, mostly focusing on sovereign administration and is not suitable for application to a host of other public services. It has the potential to corroborate any governance form which limits the usefulness of transaction cost theory (TCT) as an instrument of analysis and prediction. Although Williamson characterizes TCT as an empirical success story our application of it to the public-private dilemma for water and sanitation sector finds very little historical and contemporary validity in this view.

In general, the process and outcomes of privatisation has been studied from the point of view of efficiency. In this paper, we consider issues in the course of contract design, implementation, management and enforcement in privatised public services and utilities. The study is based on two case studies, involving several water concessions in Argentina and a management contract in urban water sector in Ghana. Three key arguments are presented on the basis of these case studies. The first is that an individualistic analytical framework is often utilised by the mainstream economic perspectives, but these are inadequate for a comparative assessment of private versus public provision in public services where there are distinct collective or group interests and hence wider socio-economic context and representation of different interests become highly important. Instead, the paper proposes a political economy perspective, which pays due attention to distributional issues, group interests, ideology of states and power relations for the assessment of privatisation contracts. Secondly, the administrative capacity of states and their resources play a key role for the outcomes of privatisation. Finally, while some contractual issues could be resolved through resourcing and experience over time, others are inherent to the contractual relations with little remedy.