neo-liberalism in the late 20th century more private sector participation was widely promoted by international development agencies, including the World Bank. However, the resulting public-private partnerships proved no better at reaching deprived urban neighbourhoods, (Budds and McGranahan, 2003; Hall and Lobina, 2007; Castro 2009; Swyngedouw, 2009).
There are several reasons why providers may lack the incentive to serve low-income communities. Urban utilities, whether publicly or privately operated, cannot achieve universal provision when they are underfinanced and when political support is lacking. There is little political support from local elites for providing services to informal settlements when there are fears, founded or otherwise, that provision will encourage illicit land development (e.g. land invasions) by urban poor groups or will attract unwanted migrants from the countryside. Cost is also a major factor, whether the costs are borne by users or financed through the public sector. Technical standards, often based on health criteria, can seem to support health equality by prescribing a minimum below which no urban resident should be allowed to fall. Unfortunately, by raising costs such standards can become exclusionary rather than empowering. This applies whether the providers are public or private: a public utility that is required to provide high standard sewer connections, but does not have the financial capacity to provide everyone with such connections, will almost inevitably leave the poorest groups unserved, thereby reinforcing inequalities.
Governments that are responsive to the needs of their less well off citizens can overcome many of the barriers to improving their urban water and sanitation (see Annex Box 7). A prerequisite for any government-implemented programme is a viable financial strategy. The same applies when the government is partnering with private suppliers to provide water and sanitation services. Public utilities and public-private partnerships can succeed if their stated goals and targets are commensurate with the investments they are able and willing to make. This is not just a question of competence, and very much one of governance (Beall, 2000; McGranahan and Satterthwaite 2006; Costa, 2009; Castro, 2009). All too often, the political pressure to adopt ambitious goals and targets is far greater than the pressure to secure sufficient finance or build sufficient institutional capacity to achieve the stated ambitions. Getting the financial and institutional aspects right requires constructive and efficient negotiations between government and civil society groups. Private-public partnerships add another governance dimension to this, as they also require negotiation across the public-