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Submitted by Shanta on

Imran: I know you said no need to reply, but I want to clarify two points. First, the reason governments are wasting resources on hospitals and tertiary education is that the people who benefit from them--the non-poor--are politically powerful, and are able to resist attempts at reform. Second, on water, it is precisely because water belongs to society that we should charge for it. If we don't charge for it, there will be no water left (as we are finding out in many countries). What you do with the revenues from water is a different issue, on which I don't think welfare economics has a particular view. The revenues could go to the government, or to a private company (or both). This is not about privatization. It is about charging marginal costs for water, whether it is a public utility or private. Shanta