Does Commercialization Undermine the Benefits of Decentralization for Local Services Provision? Evidence from Mexico’s Urban Water and Sanitation Sector

SummaryDecentralization has been promoted as a means to better reflect citizen preferences and improve local services. Many developing countries decentralized and promoted neoliberal policies such as commercialization simultaneously, leaving mayors with the responsibility of improving public services through self-financing reforms. This study evaluates experiences in three Mexican cities to assess whether decentralization and commercialization practices have resulted in improved water and sanitation services. It finds that commercialization has increased social conflict surrounding urban services provision and that local institutional constraints further undermine mayor’s ability to adopt politically contentious policies. The result has been stalled and uneven service improvements.