Has efficiency improved after the decentralization in the water industry in Venezuela?

The importance of water in life and health of population, especially in developing countries, justifies the comparative study of the performance of undertakings providing potable water and waste water collection. The main objective of this research is to investigate if the decentralization process has led to an improvement of the efficiency in the water industry. Using a stochastic frontier analysis, we show that technical efficiency of Venezuelan water companies remained around 84% and that decentralized companies were more efficient than the centralized ones. The main policy recommendation is that the process of decentralization in the water services should continue.