Efficiency of urban water supply in Sub-Saharan Africa: Do organization and regulation matter?

• Do organization and regulation affect efficiency in the water sector?
• We rely on the model developed by Battese and Coelli (1995).
• Private-sector participation in management (operations) affects positively efficiency.
• Performance contracts lead to higher technical efficiency compared to Independent regulation.
• The joint effect of ownership and regulation on efficiency is not statistically significant.

Using the model developed by Battese and Coelli (1995), we compare the technical efficiency of urban water utilities in Sub-Saharan Africa countries. We examine how private-sector participation, economic regulation, and their combination affects technical efficiency. We find that regulating water utility operations via performance contracts leads to higher technical efficiency compared to control by an independent regulatory agency. Private-sector participation in management has a positive effect on technical efficiency. However, there is no evidence of a statistically significant difference between the technical efficiency of publicly and privately owned utilities, respectively, when they are regulated by either an independent agency or a performance contract.