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The Politics of Urban Water Reform in Ghana

Author: L Whitfield
Date: 2006
Size: 24 pages (126 KB)

Summary

How does the interaction between domestic political systems and the aid system affect democratic governance? This article from the Review of African Political Economy examines the Ghanaian government’s policy of private sector participation (PSP) in urban water reform. It illuminates the pervasive role of donors in policymaking, the embeddedness of the aid system and how donors affect the process of bargaining between the state and citizens.

Private sector involvement in the provision of water services, dominated by a small number of transnational corporations, expanded rapidly during the 1990s. Multilateral donor agencies have promoted water privatisation through the channelling of aid, arguing it would improve performance and efficiency. Simultaneously, global protest networks have emerged, advocating community-public partnerships for water provision to ensure transparency and accountability. Growing empirical evidence shows that water privatisation has often produced negative consequences.

The water privatisation policymaking process in Ghana spanned almost a decade. The original policy of an enhanced lease requiring capital investment from the winning bidder was dropped in favour of a management contract, funded by a World Bank grant. Global economic events had led foreign water corporations to withdraw interest in options that risked the loss of their own money:

Although the Ghanaian government claims the PSP policy as its own, a combination of funding conditionality and persuasion through technical expertise and advice had a significant effect.
The government, with donor support, consistently ignored, dismissed or argued against the campaign by The National Coalition Against Privatisation of Water (The Coalition). The campaign was also hampered by the meagre information made publicly available.
Issues highlighted by The Coalition included lack of public participation and transparency in the policymaking process and failure to seriously consider public sector options.
The Coalition favours a decentralised system of community-public partnership and instituting proper supervisory systems to ensure accountability and transparency and to act against corruption and inefficiency.
The World Bank and donors in general have served more as participants than neutral bystanders in Ghana’s water sector restructuring process and related public discussions.
The nature of donor involvement in the policymaking process and public debate both obstructed The Coalition’s bargaining efforts, and diverted energy away from holding the government accountable.

An embedded aid system means donors are important players within the state, policymaking and the political landscape. This can both support and undermine the functioning of representative democracy:

Historically, many Ghanaians have viewed structural adjustment, the externalisation of policymaking, privatisation and the role of foreign capital as undermining the enhancement of democratic governance.
Donors have routinised and semi-institutionalised their interactions with state institutions and their participation in the policy process.
Traditionally coercive conditionality has to some extent been superseded by a more interventionist approach, with funding allocated as an incentive to carry out reforms which are closely monitored.
Donors acting as proxies for government or as intermediaries between the state and citizens can negatively affect the bargaining process and the development of institutionalised accountability mechanisms between state and society.

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Source: Whitfield, L., 2006, 'The politics of urban water reform in Ghana' Review of African Political Economy, no.109, pp. 425-448