Waste Management

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Private Sector Participation in Integrated Sustainable Solid Waste Management in Low- and Middle Income Countries

DISSERTATION of the University of St. Gallen, Graduate School of Business Administration, Economics, Law and Social Sciences (HSG) to obtain the title of Doctor Oeconomiae

submitted by

Louigueur Dorvil from Haiti

Approved on the application of

Prof. Dr. Thomas Dyllick-Brenzinger and Prof. Dr. Matthias P. Finger

Dissertation Nr. 3381 Schmitt-Druck, Essen

The University of St Gallen, Graduate School of Business Administration, Economics, Law and Social Sciences (HSG) hereby consents to the printing of the present dissertation, without hereby expressing any opinion on the views herein expressed.

St. Gallen, October 15, 2007

The President:

Prof. Ernst Mohr, PhD

Foreword
Research into privatisation is not a new thing. But some publications smell of opinions held before the research started. Louigueur Dorvil does better. He critically looks at one of the big trends of our days, rapid urbanisation in low- and middle-income countries and the environmental challenges lying in this trend. He recognises that these countries typically lack the financial means to deal with the challenges and are therefore inclined to look for foreign financial aid. As a result of loans, high debts accumulated. In this situation many see privatisation of public assets as a means to overcome excessive indebtedness. Before assessing successes and failures in low- and middle-income countries, Dorvil looked into the past of European countries that since a long time had considered solid waste management as a private affair. They learned the hard way that this approach didn’t work and finally made waste management one of the most important public duties, mostly assumed by the municipalities. To finance the system, waste charges were imposed. Public perception prevails in Europe that waste management is and must remain a public responsibility. This does not preclude public-private partnerships as long as the ultimate responsibility remains with the state. Dorvil observes that the solid waste market in low- and middle-income countries is becoming attractive for private investors. But he argues that caution should be applied when it comes to achieving an integrated system of sustainable solid waste management. Private sector participation will not by itself solve all problems. The main issue is not privatisation but the avoidance of unhealthy monopoly or oligopoly situations with a lack of competition. Another important aspect of Dorvil’s study is insufficient information. Neither the state nor private operators have sufficient information about the services contracted, leading to inefficiencies. Rightly Dorvil argues that privatisation functions best under conditions of a strong regulatory framework and that public offices need to maintain clear information and oversight of the relevant operations. Dorvil offers a thorough treatise on the goods theory, the theory on market competition and market failure in the context of solid waste management. He emphasises the need for sustainable management in the waste sector. Numerous case studies illustrate his main

points. I was pleased to see that the author argues for a healthy balance between public responsibilities and private functions. I recommend the book to decision makers in developing countries and their partners in the private sector and in international agencies. I am confident that Dorvil’s work will stand the test of time.

Prof. Ernst Ulrich von Weizsäcker Dean, Bren School of Environmental Science and Management University of California Santa Barbara Lead author, Limits to Privatization: How to avoid too much of a good thing A Report to the Club of Rome (Earthscan, London)

Abstract
The need for investment in the Solid Waste (SW) sector in Low- and Middle Income Countries (LMIC) far outstrips their financial resources. The real challenge for LMIC is...
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