The Importance of Skin in the Game in Water Management

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In developed countries, it's a lot harder to compete with the monopoly because they have ridiculous economies of scale. In developing countries where this competition is allowed, you can have fairly dramatic improvements in water quality. Competition encourages people to have to do a good job because people have alternatives. The easiest place to look for competition is for urban water is in developing countries.

David Zetland of Leiden University College in the Netherlands and author of Living with Water Scarcity talks with EconTalk host Russ Roberts about the challenges of water management. Issues covered include the sustainability of water supplies, the affordability of water for the poor, the incentives water companies face, and the management of water systems in the poorest countries. Also discussed are the diamond and water paradox, campaigns to reduce water usage, and the role of prices in managing a water system.