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Most contemporary discourse centers on the role of the state in domestic socio-political and economic development This trend is not really new since the entire classical and liberal debate dealt with reducing or enhancing the states participation versus the participation of private enterprises There are many reasons why state owned enterprises continue to exist and are considered paramount to the stability of a country Certain imperfections of the market result in the creation of anti-consumer situations whereby the average man in any country is greatly disadvantaged What most of the neoclassical literature ignores is that in certain situations decentralized market mechanisms under private information may not handle well some problems of coordination and urgent decisions which could be more readily solved by central direction Bardhan 1990 p 4 There is also a growing perception that the state has certain responsibilities with regards to its citizens which must not be dependent on whether the same are able to pay for them Rather eligibility for such commodities and services is essentially contingent on a persons citizenship This paper will investigate the unique place of water provision as an enterprise in Latin America and why there has been a general trend to privatize state-owned water services At the same time it is contended that with services like water provision and sanitation efficiency arguments are not sufficient in themselves for a motive If development and not economic growth is to be a goal then it is imperative for the state to acknowledge its responsibilities towards the citizens In this context the cases of Argentina and Bolivia stand out most especially due to the conflicting outcomes in these two countries Throughout time since the formation of nation-states most of the essential services have remained part of the states domain Provision of utilities like electricity gas water and sanitation until a decade ago was still in the hands of government officials httprruworldbankorgPapersLinksImpact-Infrastructure-Privatization Kim and Horn 1999 Part of the reason
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