Prof. McDonald: “The debate on the public ownership of water supplies should have started yesterday”

We are speaking with Professor David McDonald from Queen’s University [in Kingston, Canada – ed],  who is undertaking research in Development Studies – not very popular in Bulgaria, so would you tell us how your research brings you here?

I’ll just say that my background, my teaching area is more political economy. The Development Studies Department is interdisciplinary. For the last 20 years I’ve been doing work on the debates over public and private service delivery of essential services like water, electricity, healthcare, transportation, waste management, and for the first ten years of that I did a lot of work mostly in Southern Africa about the problems of privatization. And after that I started to realize that the debate had largely stalemated: those in favor of privatization, those opposed to privatization, I was very critical of it. The debate had just got to a point where it had become more of a shouting match.
And also those in favor of public services like myself were often saying, I think, quite simplistic things about going back to public, and that public was always, inherently and necessarily better than private. And so the last 10 years of my work has been an attempt to try and investigate that and problematize those notions of what is public, how do we know if it’s better. It’s very easy to find bad public services and so we don’t want to celebrate something simply because it’s public.

I’ve realized over the last ten years that the very notion of what constitutes public is incredibly complex – institutionally, ideologically, etc. So that’s really the focus of my work: what do we mean by good public service, how do we measure it, how do we identify it, how do we compare it from place to place?

Tell me about your current research. I understand that there are other countries, participating in it. Which are they?

This particular piece of research on remunicipalization of water, which means cities where water is currently being run in some way by the private sector and there’s a movement to try and make it public once again. I’ve done work in the past on places that have already remunicipalized their water – Paris, Buenos Aires, Dar es Salaam in Tanzania.
This particular set of research is looking at cities where it’s still in private hands but there’s a movement to try and make it public again. So we are trying to understand the kind of dynamics on the ground as they unfold, kind of balance of forces, different ideological, institutional positions. So Sofia is one of these case studies. We are also looking in this cluster at Jakarta, Indonesia, Nagpur in India, Marseilles in France, Barcelona in Spain and a small city in the United States called Missoula, Montana.
It’s perhaps an odd collection of places but it’s intended to give us both geographical spread and different contextual spread. And I thought that Sofia would be a particularly interesting place given the socialist past and the post-socialist privatization experiment.

So you’re studying water concessions basically all around the world in a lot of different backgrounds in all these places. How is it even possible to make any universal conclusions out of that?

Great question. It’s a methodological and theoretical challenge. I’ll start by saying that what makes it particularly interesting is that those in favor of privatization actually have a universal model, that there is a kind of human nature around what motivates behavior, and that the market is the best way to get efficiency out of people, and market exchange values are how people attach value to things, etc. So there is a very universalistic model, employed by institutions like the World Bank about why the private sector should run these services.
And I think in the past there was a somewhat universalistic and simplistic notion of why the public sector would be better, that there was somehow an inherent public ethos amongst bureaucrats, etc. We know this isn’t necessarily the case: we’ve seen many examples of poorly run, corrupt, inefficient public services.
What I’m grappling with is, if there is no universal standard for a) how it’s been done in the past and b) how it may be done in the future, how do we try and understand the comparisons of both different ways it has been done or different ways it could be done?
What we are trying to do with that is attach some normative principles to what we think constitutes a good public service. Things like transparency, accountability, affordability, quality of work for front line workers, efficiency. Some of these are terms that may sound familiar from the World Bank; they push for transparency, etc., so we have a particular way of trying to understand what transparency or participation means. So we use these sorts of normative values to say “Are these things in place in the way the public services run or not? And does it matter if it is not necessarily the same from one place to another?”
I’ll use the example of participation. One of the things that we say is that for public water services to be good, people should feel that they have some sort of democratic representation, that they can participate somehow in decision making. Now, in many Latin American countries this is really really important thing and some of the best public water services in Brazil for example have these quite in depth participatory budgeting mechanisms in place, where literally tens of thousands of people participate in the decision making about how money is spent on public services, including water.
That’s maybe an extreme example. In some places people don’t necessarily want to be involved in that, so when Paris remunicipalized its water in 2010 there was virtually no public participation; it was a decision taken at municipal government level and it just became public on January 1st, 2010. Since then the municipality of Paris has been trying to engage people more, and make the system more participatory. But just because they are not doing as much participation as, say, Porto Alegre in Brazil doesn’t mean that Paris’s public water is any better or any worse.
We try and weigh these different factors out. To say, ‘Are you doing the kind of things that we think are positive for public services? How many of them are you doing?’ and you can sort of weigh these things out to assess whether or not a public service is positive or not. So if you are not doing any of these things that’s a problem. Maybe you are doing really well on participation, but if your services unaffordable, if they are inefficient, if the government running them is not very transparent, then you can say: well maybe this isn’t a particularly good model.

In Bulgaria we have plenty of cases, not only with water supply companies, but also electricity providers, and now even the hospitals – they’re acting the same way whether they are public or private, because they are commercially oriented. So what you are basically saying is that it’s not enough to change the ownership, you have to invent a new model of governing, a more democratic one?

I think it’s both institutional (what kind of mechanisms, for example, do you have that allow people to participate in decision-making?), but also there’s a kind of ethos associated with it as well, so you mentioned the commercially operated public services, and this has been one of the biggest problems in water and electricity, and healthcare, where services are owned and operated by the state, but often they are at (sort of) arm’s length – legally separate entities where management has been given not only the right but in fact the duty to act like a private company, and think about the financial bottom line, and efficiency tends to (sort of) drive a lot of the decision-making. I call these corporatized entities.

And this is financial efficiency?

And this is financial efficiency. So it’s a very narrow way of defining how you do efficiency and it tends to attach value to things based on people’s decision around the financial cost of things. So you hear about value for money a lot in these kinds of public utilities. Now, they can be very efficiently run in those narrow terms, but they can also have all kinds of inefficiencies associated with them because water operators won’t be communicating effectively with health operators or electricity operators and you lose that more broad horizontal, holistic view of understanding what a public service is, which can be a problem.
I think that sort of deeper ethos of why a public service is there, and is it simply there for financial efficiency or are there other cultural, political, institutional reasons for why you might have a public service? And I’ve often said that maybe a public service can actually lose money, and that might not be a bad thing because there are other broader social gains for why you might, for example, lose money in water but get gains in health and other areas of society.

You said you’re interested in the debate over public versus private services. You have met a lot of people in the last couple of weeks, right? Can you tell if there is such a debate in Bulgaria?

I would say that there is certainly a very widespread notion that there is something deeply wrong with the way that privatization unfolded in this country for the last 20 years.

Privatization in common?

In general, and I think there is a deep concern with the way that the Sofia water concession was developed and the way it’s still run. I’ve seen that really across the spectrum: with my colleague here Georgi Medarov, we’ve met really the whole spectrum of opinions on this thing – from the left to the right, pro-privatization, anti-privatization, and I think there is a general consensus that this concession has been deeply problematic. Some people think that it’s getting better and can be saved, that the privatization model still works, but I think there is pretty widespread discontent with the model.
What I haven’t seen is a clearly articulated vision for what a public water operator would look like. And I think that there is this general sense that we’ll just bring it back into public hands, and everything is going to be ok, but clearly there are some very deep challenges to making that happen.

Well, this water concession in Sofia is about to expire in 2025. This means we have seven years to figure out what kind of service we want after that.  How important do you think is it that we find a new way to govern this probably public company – if we remunicipalize it?

The first thing I would say, even to those who are in favor of privatization, is that you should always be prepared for the possibility of water becoming public again, because Veolia might not be interested, you might have other private water companies that are not interested. This has happened, for example in Canada, in the city of Hamilton. The municipality wanted to retender the contract for a private water provider. Nobody was interested, and they were forced to take it back into public hands.

So whether we want a public or a private company to run this water supply system, we have to think of an alternative?

Yes, I don’t want to use necessarily a war metaphor, but you need to be prepared for any possibility. And I think it’s in everybody’s best interest to give that some thought. Now, having said that, I think the progressive forces in this country need to think about what kind of progressive water operator they want. Because I think there are three possibilities for public happening here. One is that it goes back into a kind of crony capitalism – nationalist forces that simply want control of an essential resource where they have control over 150 million leva in revenues every year.

Like in Hungary?

Like in Hungary, where we’ve seen Orban’s government bring it back in-house and then they outsource it to their friends, and it’s not particularly democratic or efficient – it sort of fails on all those criteria of good performance for a public utility.
The second option is that it could become a kind of neoliberal, corporatized entity where you create an arm’s length legally autonomous, semi-autonomous water utility that’s effectively run like a private agency. And with the current Sofia Veolia managers, that may come back into running a public utility like that. They would just bring that private sector ethos into this new public entity. And the World Bank, I should notice, is very influential in the water sector here and they’ve been promoting this type of corporatization model for many years around the world, so that’s a possibility.
The third possibility is a more progressive, socialized, social-democratic kind of model, of places that we’ve seen, like Paris, Berlin, the current struggles going on in Barcelona where people are articulating a different kind of public. One that isn’t just simply top-down, bureaucratic, run only by engineers, one that’s more socialized and politically sensitive, and takes progressive tariff structures seriously.
For example, dealing with the Roma challenge here, where frankly it’s a disgrace how few Roma have good quality water services. A progressive water agency would have to think about ‘how do you deal with this challenge?’ How do you construct tariffs, how are you going to invest heavily in these areas, and how do you engage in a meaningful way with Roma people in the decision-making about these things? So you know these things don’t happen overnight and I think 7 years from now when the contract is over I think we should probably start yesterday in terms of planning for the future.

In some sense it’s started. Here we have your book which was published a few years ago in Bulgaria. It’s called “Remunicipalisation: Putting water back into public hands”. First, this notion of remunicipalisation, can’t be very popular. You should really think about something pronounceable.

Well, in fact there is a debate in activist circles and in academic circles about the term, in part because sometimes it happens at a national level. And in some places because people don’t actually want the state involved. I was sitting in a meeting in Cochabamba in Bolivia, a number of years ago, where I talked about remunicipalization and the municipality taking over water again, and then half the people in the room just stood up and walked out, because they don’t want the state involved in this service delivery. There is a much more autonomous, sort of anarchist kind of political movement there, that doesn’t want the state involved. So in fact the term is contested and there are different ways of thinking about what it means to (sort of) go public again, and what role does the state play, etc.

So in the end I have one more general question for you since you are standing for kind of public ownership of these essential services for the society and the communities. Before all you are a social scientist, but your work kind of brings you to social activism. Many people would argue that scientists, especially social ones, should not be engaged in making political conclusions, that they should be neutral. How do you think, what place does it take – your research field – in society?

I’ve always considered myself, and this comes in part from my mentors when I was a graduate student, to be a scholar activist. But I also say to people that challenge that, that all scholarship is activist. There is no such thing as pure objectivity, so those who support the kind of status quo which seems objective, in fact they’ve adopted a particular methodological or ideological framework which is actively supporting a particular position.
So I see that as activist scholarship. It perhaps is done in ways that they don’t even see for themselves, that it’s activist. When you are challenging the status quo and you step outside the pure academic bounds, people will often say you are overreaching, this is activist scholarship. And I embrace that.
Having said that, I do it in ways that I think are methodologically rigorous, that are alert to the possibility of bias, and for example when I met with people this week I always start my interviews by saying that I have been a supporter of public services and critical of privatization, to give them a sense of where I’m at. But I also make it very clear that I’m also challenging some people who say that just because something is public it’s always good. And I think that puts people at ease. And providing an honest and fair representation of what people have to say.
I met with one senior manager from Veolia, the private water company that’s managing the Sofia water and I made it clear to him that I’m not here to try and make Veolia look bad, I’m here to honestly hear what you have to say and to represent that fairly. And I’m going to send him, as I will with everybody else, a draft copy of the article that Georgi and I will be writing and give him the opportunity to comment or fact check. He probably won’t agree with much of what I have to say, but I think that’s a kind of procedural, methodological way of introducing objectivity into what is an inherently subjective field of study.

I particularly like your answer because it also applies to media and journalism. When is this study about to be ready?

We are sort of working up a draft paper and I’m hoping in the next couple of months we’ll have a full draft paper ready to circulate to people and then it will sort of get into the typical peer review process in academia and, along with my colleagues who are doing case studies in the other cities, we are going to be publishing this work as part of a special issue of an academic journal next spring, which is open access – “Water alternatives”, it’s called. But I suspect we will try and put something out in Bulgarian here as well, perhaps a little more popular in its format, a little more accessible to help contribute to the debate. As a scholar activist I always think ‘what can I do to contribute to an important debate?’ And that’s really the nature of my activism if you will.