The Social Costs of Water Commodification in Developing Countries

Abstract

As W. Kapp characterized, social costs consist in harmful effects and inefficiencies that are part of the course of productive activities and are shifted to third persons or the community at large. The first aspect that will be dealt with in this chapter when examining the social costs of water collection and distribution concerns the process through which water has been transformed into a commodity. From this commodification of water it results not only that its consumption can be unequally distributed among people but also that it is possible for some human beings to be excluded from access to water. Partly as a consequence of this fact, the World Health Organization believes that more than a billion people are deprived of basic access to water. The United Nations Organization, in its turn, estimates that about 2.3 billion people suffer from diseases connected to water, in other words to both its shortage and poor quality. This will be the second aspect that we will examine as this is a good example of a social cost. Indeed, the 2006 Human Development Report states that the direct and indirect costs of keeping the current deficit of safe water provision in developing countries, for example, represent nine times the cost of providing universal coverage, the overall loss due to lack of water and sanitation is about 5% of GDP and each monetary unit spent produces 8 units in savings and productivity. Plus if one considers the opportunities lost by women and the days of school lost by children with the time spent in water collection the insufficient water coverage also decisively contributes to poverty in adult age. One could say that this is the consequence of underdevelopment but according to Pedro Arrojo, a leading scholar in issues concerning the ethics of water use, providing water for people’s basic needs is within reach of every national economy. The third aspect that will be dealt with concerns water supply by competitive markets. This market structure is inadequate to supply water to human consumption and agricultural production and will cause social costs if used without regulation by public or community authorities. One approach to reducing the social costs of water collection and distribution consists therefore in decommodifying water.