Eduardo Araral
National University of Singapore
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Featured researches published by Eduardo Araral.
Policy and Society | 2009
Eduardo Araral
Abstract During much of the 1990s, water utilities worldwide experienced a wave of privatization. The rationale for this is largely based on two hypotheses: the fiscal hypothesis and the efficiency hypothesis. This article examines the evidence and concludes that water utilities privatization has been a failure.
Water Resources Management | 2013
Eduardo Araral; Yahua Wang
Water scholars and practitioners generally agree that improving water governance is the key to addressing water insecurity in developing countries. We review the literature on water governance and argue for a second-generation research agenda, which pays more attention to the study of incentive structures, is multi and inter-disciplinary in orientation and with clear policy implications. We then illustrate how theories drawn from public economics, new institutional economics, political economy and public administration can help diagnose the challenges of integrated water resources management, improving efficiency of water utilities, privatization of utilities and public-private partnerships, water pricing reforms, virtual waters/water trading, among others. We conclude that these tools can help advance the second-generation research agenda on water governance.
Water Policy | 2010
Eduardo Araral
This paper provides an overview of the reform of water institutions in developing countries in the last three decades focusing on the ‘what, why and how’ of institutional reform, and outlines their implications for policy and research. The review covers four areas: (1) water rights and river basin institutions; (2) decentralized irrigation management; (3) private sector participation in urban water supply; and (4) regulation of water infrastructure. The review suggests that (a) the theoretical rationale for reforms is mostly grounded on arguments for efficiency, effectiveness and fiscal sustainability with little considerations for equity; (b) models of institutional design varies from incremental to comprehensive; and (c) implementation experiences among countries are mixed, given the conditional nature of institutional reform; and (d) changes in elite perception holds the key to reform.
International Journal of Water Resources Development | 2013
Eduardo Araral; Yahua Wang
The present paper reviews the literature on urban water demand management and compares practices in South-East Asia. Existing literature is mostly from developed economies and is concerned mainly with elasticity studies, which are not relevant to developing countries because their main problem is non-revenue water. Cities in South-East Asia employ both price and non-price mechanisms to regulate demand. Price mechanisms include increasing block tariffs, fixed, volumetric, raw water, and conservancy charges, rebates, cross-subsidies and periodic rebasing. Non-price mechanisms such as management, engineering and regulatory mechanisms, as well as public education and community involvement, play important roles. More studies are needed to establish their efficacy and cost-effectiveness.
Journal of Economic Policy Reform | 2006
Eduardo Araral
Abstract From 1992 to 1998, the Philippines saw a period of sweeping policy reforms when 273 economic, social and political legislations were adopted. When and why do policy reforms happen and what explains the scope, pace and sequencing of their implementation? My analytic narrative differs from the literature in its emphasis on: (1) the attributes of the players, particularly the role of leadership; (2) the attributes of the policy; and (3) the political rules of the game, including electoral cycles, tenure limits, veto rules and “turncoatism.”
Water Resources Management | 2017
Eduardo Araral; Alberto Asquer; Yahua Wang
Conventional view holds that beliefs play an important role in the development of regulations but there is little evidence to support this claim. We use Comparative Q Methodology to systematically map out and compare the beliefs of public officers in China and Italy, two countries with contrasting sets of institutions but have both adopted similar ideas about integrated water resource management. We find some similarities and differences in the beliefs of public officers in both countries. In particular, we find that in both countries beliefs on the regulation of water utilities are diverse and fragmented on issues such as ownership structure of water utilities, how water infrastructure development should be funded, and how tariffs should be regulated. Our findings have two implications for theory, methods and practice. First, the Q methodology is a useful tool for systematically mapping out the beliefs of regulators and managers. Second, systematically mapping out beliefs will help facilitate the development of an alternative regime of regulation such as negotiated rule making. This alternative regime can provide substantial benefits such as more efficient rule making, more cost effective enforcement and compliance, and more equitable in terms of balancing the interests of stakeholders.
Policy and Society | 2009
Eduardo Araral
The purpose of this issue is to propose a diagnostic framework – the institutional analysis and development framework (Fig. 1) – as a starting point to answer Stiglitz’s question ‘‘depends on what?’’ The framework suggests that the outcomes of privatization and regulation depend on at least three broad sets of factors: (1) the characteristics of the service to be privatized/regulated; (2) the characteristics of the players involved; and (3) the transaction cost characteristics of institutions (Roland, 2008). First, the characteristics of the good to be privatized affect the outcomes of privatization. For example, a good with natural monopoly characteristics would engender different incentive structures and hence different outcomes for privatization and regulation compared with a private good, a public good, club good or a common pool good. Information problems embedded in a good – whether it is the case of missing or asymmetric information, search good, experience good or post experience good – conceivably also matter to the outcomes of privatization and regulation. For example, the monopoly or oligopoly control of information by managers of state owned enterprises in the former Soviet Union led to the capture of state assets – estimated by Stiglitz at
Policy and Society | 2007
Eduardo Araral
1.5 trillion – by a few individuals and eventually the formation of an oligarchic class. Information problems also limit what governments can anticipate, specify, regulate and enforce and therefore also sets a limit to what can be achieved by government regulation (Roland, 2008). Second, the characteristics of players involved – the regulators, investors, politicians, consumers, their group size, ideologies or beliefs, history of cooperation/social capital and levels of trust, heterogeneity, etc. – also matter to the outcomes of privatization and regulation. For instance, by its nature governments have multiple, unclear and changing objective functions. Governments need to balance concerns for efficiency with equity and sustainable development as well as concerns for national security, among others. Governments are also subject to pressures from interest groups and that government objectives could change from one administration to the next. Government agents are also known to pursue objectives that are inconsistent with efficiency and social welfare. In developing countries, the extent of poverty would affect the political salience of a particular good to be privatized, for example basic services such as water, education and health and thus the affects the politics and likelihood of success of privatization. The extensive literature on the problem of credible commitment and political and regulatory risks and collective action are good starting points to analyze how attributes of players matter to the outcomes of the privatization game. Third, the framework suggests that the transaction cost characteristics of institutions matter to the outcomes of privatization and regulation. For instance, the perverse incentives arising from the monopoly characteristics of a good can be mitigated through varying types of regulation—price, quantity, quality and standards regulation, among others. www.elsevier.com/locate/polsoc Available online at www.sciencedirect.com
Archive | 2016
Eduardo Araral; Mulya Amri
Abstract Is foreign aid compatible with good governance? Using the case of irrigation aid in the Philippines, I hypothesise that aid is embedded in a perverse set of incentives which could undermine the application of good governance principles espoused by donors. My findings suggest that the problems of “moral hazard” and aid fungibility are embedded in irrigation aid. Furthermore, these incentives also drive a vicious cycle in irrigation commonly found in many developing countries. These findings indeed suggest that incentives structured into the relationship between donors and irrigation agencies may undermine the application of some principles of good governance espoused by donors.
Archive | 2015
Eduardo Araral; Riccardo Pelizzo; Aziz Burkhanov; Yu-Wen Chen; Saltanat Janenova; Neil Collins
Much is known in the literature about institutions and the policy process. However, the literature generally tend to be implicit and Western centric and has not systematically studied the implications of institutional theory. In this chapter, we explore several implications of institutional theory for the policy process literature using the Institutional Analysis and Development Framework. We focus in particular on agenda setting, policy sub- systems, politics and policy, instrument choice, implementation, learning and isomorphism, the role of language and ideas and the importance of developing a set of diagnostic tools. Our aim is to start a conversation - which we refer to as policy process 2.0 - between scholars of institutions and policy studies. We argue that systematically linking institutional theory with the policy studies literature – using the IAD Framework – helps open up a promising research agenda.