The 1989 privatization of the water supply sector in England and Wales is a

much-cited model of ‘‘market environmentalism’’: the application of market institutions to natural resource management as a means of reconciling goals

of efficiency and environmental conservation. With the privatization of the

water supply industry in 1989, ownership passed from nationalized mono-

polies to private companies, listed on the London Stock Exchange. The

controversy over privatization has often obscured the fact that a much

broader transformation of water supply management in England and Wales

has occurred over the past three decades. Demand management has been

increasingly prioritized over supply-side management strategies (such as dams and other large-scale hydraulic infrastructure). Economists and

environmental scientists have supplemented (and to some extent displaced)

engineers in managerial positions. Water is no longer perceived to be uni-

versally abundant: ‘‘areas of water scarcity’’ have been enshrined in legisla-

tion. Efficiency and cost-reflectiveness are prioritized over social equity in

water pricing; national cross-subsidies have disappeared and regional cross-

subsidies dwindled. Consumers are characterized as ‘‘customers’’ rather

than ‘‘citizens,’’ and their means of participation in policy debates has changed significantly, although their influence has not necessarily increased.

Environmental and drinking water quality have improved; according to the

environmental regulator of the industry, river water quality in Britain is at

its highest level since the Industrial Revolution (Bakker 2004).