Free-market economics and developmental statism as political paradigms: implications for water governance theory and practice in developing countries

Key actors in various developing countries are often confronted by difficult choices when it comes to the selection and deployment of appropriate water governance regimes taking into account national socio-economic and political realities. Indeed, scholars and practitioners alike continue to grapple with the need to create the optimum water-supply and allocation decision-making space applicable to specific developing countries. This chapter uses case studies to explore the utility of free-market economics and developmental statism as two major paradigms that have emerged in the face of enduring questions about how best to govern water supply systems in developing countries. The chapter establishes that increasing pressure on available natural resources may have already rendered obsolete some of the water-supply systems and governance regimes that have served human societies very well for many decades. It is also clear that national water-supply governance paradigms tend to change in tandem with emerging national development theoretical frameworks and priorities. Each nation or local government feels compelled to adopt a particular framework to fulfil its needs taking into account the broader global water policy context. While many developing countries have adopted water policy prescriptions from the international arena, national and local socio-economic and political realities ultimately determine what works and what does not work on the ground. Local realities have also helped to inform how nation-states domesticate global concepts for their local purposes. Thus, the choice between free-market approaches and developmental state-oriented approaches is never simple, and hybrid models are often deployed. Indeed, the majority of countries and municipalities rely on a mix of market economics and developmental statism to make their water governance regimes more realistic and workable on the ground.