Privatization, water access and affordability: Evidence from Malaysian household expenditure data

The aim of this paper is to examine empirically the impact of privatization on water access and affordability in Malaysia using household expenditure data. The development of water sector in Malaysia in terms of coverage has been fairly uneven. Some states have privatized their water supply sector while others have not. The overall finding of this study is that the impact of privatization on access and affordability in the Malaysian water supply sector is ambiguous. Privatization does not seem to have improved access to treated water from network in Malaysia. A likely explanation of this is the role played by the government in the sector in terms of tariff regulation and universal service provision. Furthermore, privatization does not seem to have adversely affected affordability in the sector. In addition to political intervention in tariff regulation, this could be due to the government maintaining a significant stake in privatized water companies.

Research highlights► The study examines empirically the impact of privatization on water access and affordability in Malaysia using household expenditure data. ► The overall finding of this study is that the impact of privatization on access and affordability in the Malaysian water supply sector is ambiguous. ► Privatization does not seem to have improved access to treated water from network in Malaysia. ► Furthermore, privatization does not seem to have adversely affected affordability in the sector. ► These results are likely to be explained by the extensive role of the government in the sector.