A Means to an End: Studying the Existing Environment for Private Sector Participation in Water and Sanitation Sector

Given that the degree of success of private sector participation in the water and sanitation sector is such a hotly debated topic, we believe there is a need to empirically study the environment within which private investment currently exists. Using Logit estimation, and investigating 29 political, economic, and demographic variables from 39 developing countries, we found that neither the political nor demographic environments play a role in explaining the existence of private sector participation. However, our empirical estimates show that many economic variables do play a significant role. Furthermore, we hypothesize that much of the determination of reaching financial closure with the private sector is due to proprietary conditions between the private sector and the governments involved.