Abstract:
In 1998, most officials in El Salvador recognize that the water infrastructure and the institutions responsible for managing that infrastructure are in disrepair. Without reforms, the country would be unable to provide water and sewerage services to a majority of its people. The Inter-American Bank had made it clear that financial aid to El Salvador was contingent upon the country's willingness to restructure its water system. Admittedly, there were major differences among the parties as to how the system should be reformed, but not whether it should be.
Learning Objective:
This case can be used as a basis for discussion of the feasibility and implications of specific options, such as privatization and municipalization, in El Salvador. It can also be used to gain a better understanding of the lessons from El Salvador's experience that are transferable to similar situations in other countries.
