Advertisement

Thirsting for Efficiency: Technological and Transaction-Cost Explanations for the Municipalisation of Water Supplies

  • Álvaro Ferreira da SilvaEmail author
Chapter
  • 19 Downloads
Part of the Trends in the History of Science book series (TRENDSHISTORYSCIENCE)

Abstract

This chapter advances two main explanations for the waterworks’ municipalisation trend after the late nineteenth century. On the one hand, the importance of abundant water in sustaining the technological innovation behind the new sewerage system. On the other hand, the difficulties in designing a proper regulatory framework for private firms in the water industry motivated by the high transaction costs in designing and enforcing contracts. Paradoxically, this argument is based on the study of a European city where private ownership and operation subsisted until the late twentieth century. Asking why Lisbon failed the municipalisation trend flips the conventional question on the reasons for increasing public ownership in water supplies. In a similar way to the deployment of counterfactual arguments for dealing with research questions, asking why municipalisation did not occur is similarly relevant, and perhaps even more illuminating in explaining the municipalisation movement.

References

  1. Amaral, Luciano and Silva, Álvaro Ferreira da. 2014. “War Finance (Portugal),” in Daniel, Ute et al. (eds.), 1914-1918-online. International Encyclopedia of the First World War. Berlin (https://encyclopedia.1914-1918-online.net/article/war_finance_portugal?version=1.0).
  2. Casson, Mark. 1998. “An Economic Theory of the Free-Standing Company,” in Mira Wilkins and Harm Schröter (eds.), The Free-Standing Company in the World Economy, 1830–1996. Oxford: Oxford University Press, 99–128.Google Scholar
  3. Chandler Jr, Alfred D. 1979. The Railroads, pioneers in modern management. New York: Arno Press.Google Scholar
  4. Coase, Ronald H. 1937. “The nature of the firm.” Economica. 4(16): 386–405.Google Scholar
  5. Cutler, David and Grant Miller. 2006. “Water, Water Everywhere: Municipal Finance and Water Supply in American Cities,” in E. L. Glaeser and C. Goldin, Corruption and Reform. Lessons from America’s Economic History. Chicago: The University of Chicago Press, 153–85.Google Scholar
  6. Demsetz, Harold. 1968. “Why regulate utilities?” The Journal of Law and Economics, 11(April): 55–65.Google Scholar
  7. Ekelund Jr., Robert E. and Robert F. Herbert. 1990. A History of Economic Theory and Method. New York: McGraw-Hill International Edition.Google Scholar
  8. Falkus, Malcolm E. 1977. “The development of municipal trading in the nineteenth century.” Business History, 19(2): 134–161.Google Scholar
  9. Hamlin, Christopher. 1992. “Edwin Chadwick and the engineers, 1842–1854: the systems and antisystems in the pipe-and-brick sewers war.” Technology and Culture, 33: 680–709.Google Scholar
  10. Hassan, J. A. 1985. “The Growth and Impact of the British Water Industry in the Nineteenth Century.” The Economic History Review, 38(4): 531–47.Google Scholar
  11. Hohenberg, Paul M., and Lees, Lynn Hollen. 1985. The making of urban Europe, 1000–1950. Cambridge (Mass.): Harvard University Press.Google Scholar
  12. Jacobson, Charles D. 2000. Ties that bind: economic and political dilemmas of urban utility. Pittsburgh: University of Pittsburgh Press.Google Scholar
  13. Jacobson, Charles D. and Joel A. Tarr. 1996. “No Single Path: Ownership and Financing of Infrastructure in the 19th and 20th Centuries,” in Infrastructure Delivery: Private Initiative and the Public Good. New York: World Bank Publications.Google Scholar
  14. Kellett, J. R. 1978. “Municipal Socialism, Enterprise and Trading in the Victorian City.” Urban History Yearbook, 5: 36–45.Google Scholar
  15. Lopes, Teresa Silva, Casson, M., and Jones, G. 2018. “Organizational Innovation in Multinational Enterprise: Internationalization Theory and Business History.” Journal of International Business Studies.  https://doi.org/10.1057/s41267-018-0156-6.
  16. Masten, Scott E. 2010. “Public Utility Ownership in 19th Century America: The “Aberrant” Case of Water.” Journal of Law, Economics, & Organization, 27(3): 604–54.Google Scholar
  17. Melosi, Martin V. 1994. “Sanitary Services and Decision Making in Houston, 1876–1945.” Journal of Urban History, 20(3): 365–406.Google Scholar
  18. Melosi, Martin V. 2000. The Sanitary City: Urban Infrastructure in America from Colonial Times to the Present. Baltimore: Johns Hopkins University Press.Google Scholar
  19. Milward, Robert. 2000. “The political economy of urban utilities,” in Martin Daunton (ed.). The Cambridge Urban History of Britain, vol. 3. Cambridge: Cambridge University of Press, 315–350.Google Scholar
  20. Millward, Robert. 1991. “Emergence of gas and water monopolies in nineteenth-century Britain: contested markets and public control.” in James Foreman-Peck (Ed.), New perspectives on the late Victorian economy. Essays in quantitative economic history. Cambridge: Cambridge University Press.Google Scholar
  21. Millward, Robert. 2005. Private and Public Enterprise in Europe. Energy, Telecommunications, and Transport, 18301990. Cambridge: Cambridge University Press.Google Scholar
  22. Millward, Robert and Robert Ward. 1993. “From Private to Public Ownership of Gas Undertakings in England and Wales, 1851–1947: Chronology, Incidence and Causes.” Business History, 35(3): 1–21.Google Scholar
  23. Moorhouse, John C. 1986. Electric Power: Deregulation and the Public Interest. San Francisco: Pacific Institute for Public Policy Research.Google Scholar
  24. Robson, William A. 1935. “The public utility services,” in H. J. Laski, & et. al. (Eds.), A century of municipal progress, 18351935. London: George Allen & Unwin Ltd.Google Scholar
  25. Saraiva, Tiago. 2005. Ciencia y ciudad: Madrid y Lisboa, 1851–1900. Madrid: Centro Cultural del Conde Duque.Google Scholar
  26. Saraiva, Tiago, Schmidt, Luísa, and Pato, João. 2014. “Lisbon Water Regimes: Politics, Environment, Technology and Capital (1850–2010).” Flux 3: 60–79.Google Scholar
  27. Schmidt, Luísa, Saraiva, Tiago, and Pato, João. 2011. “In Search of the (hidden) Portuguese urban water conflicts: the Lisbon water story (1856–2006),” in Barraqué, B. Urban Water Conflicts. London: Taylor & Francis, 69–91.Google Scholar
  28. Sharkey, W. W. 1982. The Theory of Natural Monopoly. Cambridge, Cambridge University Press.Google Scholar
  29. Silva, Álvaro Ferreira da. 1994. “Modos de regulação da cidade: a mão visível na expansão urbana.” Penélope 13: 121–146.Google Scholar
  30. Silva, Álvaro Ferreira da. 2004. “Running for money: municipal trade in Lisbon (1860–1910),” in A. Giuntini, P. Hertner e G. Núñez (eds.) Urban Growth on Two Continents in the 19th and 20th Centuries. Technology, Networks, Finance and Public Regulation. Granada: Editorial Comares, 85–116.Google Scholar
  31. Silva, Álvaro Ferreira da. 2006. “Sanitary revolution and technology in nineteenth century Lisbon,” in Michèle Merger et al. (eds.), Les transferts technologiques dans l’espace méditerranéen. Perspectives historiques à long terme, Paris: CNRS, 391–414.Google Scholar
  32. Silva, Álvaro Ferreira da. 2007. “The peculiar customer: conflicts of power and the modern water supply system in Lisbon,” in Denis Bocquet (ed.), Réseaux techniques et réseaux de pouvoir dans les villes européennes (XIXe siècle-début XXe siècle), Rome: Éditions de l’École Française de Rome, 203–224.Google Scholar
  33. Silva, Álvaro Ferreira da. 2014. “Organizational Innovation in Nineteenth-Century Railway Investment: Peripheral Countries in a Global Economy.” The Business History Review, 88 (04): 709–736.Google Scholar
  34. Silva, Álvaro Ferreira da and Bartolomé, Isabel. Forthcoming. “Electric Power Industry: Experiments in International Business,” in The Routledge Companion to Makers of Global Business. New York: Routledge, 332–348.Google Scholar
  35. Silva, Álvaro Ferreira da and Matos, Ana Cardoso de. 2004. “The networked city: managing power and water utilities in Portugal (1850s-1920s),” Business and Economic History On-Line, vol. 2 (http://w.thebhc.org/sites/default/files/daSilvaMatos_0.pdf).
  36. Silva, Álvaro Ferreira da and Sousa, Luísa. 2009. “In search of the urban variable: Understanding the roots of urban planning in Portugal.” Métropoles 6. (https://journals.openedition.org/metropoles/4029).
  37. Spar, Debora and Bebenek, Krzysztof. 2009. “To the Tap: Public Versus Private Water Provision at the Turn of the Twentieth Century.” Business History Review 83(4): 675–702.Google Scholar
  38. Stine, Jeffrey K., and Tarr, Joel A. 1998. “At the intersection of histories: technology and the environment.” Technology and culture, 39(4): 601–640.Google Scholar
  39. Sutcliffe, Anthony. 1982. “The growth of public intervention in the British urban environment during the nineteenth century: a structural approach,” in J. H. Johnson, & C. G. Pooley (eds.), The structure of nineteenth-century cities. London: Croom Helm, 107–124.Google Scholar
  40. Tarr, Joel A. 1979. “The Separate Vs. Combined Sewer Problem: a Case Study in Urban Technology Design Choice.” Journal of Urban History, 5: 308–39.Google Scholar
  41. Tarr, Joel A. 1984. “Water and wastes: a retrospective assessment of wastewater technology in the United States, 1800–1932.” Technology and Culture, 25: 226–264.Google Scholar
  42. Tarr, Joel A. 1985. “Building the urban infrastructure in the nineteenth century: an introduction”. Essays in Public Works History (14): 61–85.Google Scholar
  43. Tarr, Joel A. 1988. “Sewerage and the development of the networked city in the United States, 1850–1930,” in Joel A. Tarr and Gabriel Dupuy (Eds.), Technology and the rise of the networked city in Europe and America. Philadelphia: Temple University Press, 159–185.Google Scholar
  44. Tarr, Joel A. 1996. The search for the ultimate sink urban pollution in historical perspective. Akron, Ohio: University of Akron Press.Google Scholar
  45. Tarr, Joel, and Dupuy, Gabriel 1988. Technology and the rise of the networked city in Europa and America. Philadelphia: Temple University Press.Google Scholar
  46. Tarr, Joel A., and Konvitz, Josef W. 1987. “Patterns in the development of the urban infrastructure,” in H. Gillette Jr. and Z. L. Miller (eds.), American urbanism: a historiographical review: New York: Greenwood Press, 195–226.Google Scholar
  47. Troesken, Werner. 1997. “The Sources of Public Ownership: Historical Evidence from the Gas Industry.” Journal of Law, Economics, and Organization 13(1): 1–25.Google Scholar
  48. Troesken, Werner. 1999. “Typhoid Rates and the Public Acquisition of Private Waterworks, 1880–1920.” Journal of Economic History 59(4): 927–948.Google Scholar
  49. Troesken, Werner and Geddes, Rick. 2003. “Municipalizing American Waterworks, 1897–1915.” Journal of Law, Economics, and Organization 19(2), 373–400.Google Scholar
  50. Wilkins, Mira 1988. “The free-standing company, 1870–1914: an important type of British foreign direct investment.” The Economic History Review, 2nd ser., 41(2): 259–282.Google Scholar
  51. Williamson, Oliver E. 1975. Markets and Hierarchies: Analysis and Antitrust Implications. New York: Free Press.Google Scholar

Copyright information

© Springer Nature Switzerland AG 2020

Authors and Affiliations

  1. 1.Nova SBE (Nova School of Business and Economics)CarcavelosPortugal

Personalised recommendations