This evening in Berlin, I will debate Wenonah Hauter of Food and Water Watch on whether full cost pricing is the best way to ensure good water service to the poor.
I represent the pro-side of the debate. Ms. Hauter represents the con-side that favors (presumably) government subsidies to water-service.
One of my points is that incompetent and corrupt governments cannot get water to poor people. I claimed this in my paper on human rights and water, but I looked for some data and got this:
This figure shows Aggregate governance indicators (from the World Bank) on the x-axis and Access to an improved water source (from the UN) on the y-axis for 170 countries, as of 2008. Here's my XLS.
You can see that the R^2 (goodness of fit) is 0.43. The correlation between the two variables is 0.66.
Note that this is an indirect argument, since it's quite possible for locally-managed, independent water agencies (private, public or in-between) to provide good service without suffering from the generalized corruption of the country. It's the independence that matters, as it frees the agency from distant complications so that it can concentrate on sustainable operations.
Bottom Line: Don't depend on incompetent governments for your water.