Leviathan as a client: Public vs private contracting of desalination technologies to address water scarcity
Focusing on water provision as a societal grand challenge, we examine the comparative roles of public and private actors in promoting technologies that address water shortages and, specifically, assess how those actors adopt alternative desalination technologies that differ in their sustainability dimensions. While prior research has explored how governments can promote new technologies through subsidies, tax breaks, or direct public investment, we examine how public actors (as opposed to private actors) can act as clients, contracting with desalination plants that deploy new technologies. Using data on all desalination plants worldwide from industry inception in the 1950s through 2015, and leveraging meteorological drought data as an instrumental variable, we establish a causal relationship between public commissioning and the adoption of reverse osmosis, the most energy-efficient desalination technology. Droughts increase the relative participation of public commissioners, who, in turn, are associated with substantially higher reverse osmosis adoption: a 1 percentage point increase in the proportion of public commissioners leads to a 1.104 percentage point increase in the proportion adopting reverse osmosis technology. Crucially, we find that this effect is contingent on countries' institutional development, but in a nuanced manner: while drought shocks provoke stronger public-sector mobilization in countries with higher institutional development, the technological impact of public commissioning on reverse osmosis adoption is 2.39 times stronger in countries with lower institutional development. We find that this pattern is driven by scope and scale, where in lower institutionally developed contexts, public commissioners are associated with plants of broader national scope and larger operational capacity. At the same time, by examining environmental externalities using satellite-based ocean salinity data, we demonstrate that both public and private desalination plants increase ocean surface salinity, but only in countries with lower institutional development, consistent with a pollution-haven pattern. By highlighting the inherent trade-offs and institutional contingencies in addressing water scarcity through technology adoption, our paper advances understanding of economic organizing for pressing societal issues.
About Leandro:
Leandro Pongeluppe is a socio-environmental impact specialist, an assistant professor at the Wharton School of Management, University of Pennsylvania, and currently a Leonard J. Horwitz Faculty Scholar. Leo’s primary research interests are related to stakeholder management and socioeconomic development. Particularly, Leo is interested in understanding how organizations’ design and governance affect the achievement of the United Nations’ Sustainable Development Goals (SDGs), such as poverty alleviation, environmental conservation, and healthcare. Leo uses mixed methods in his research, combining econometric causal inference methods with ethnographic techniques to analyze multi-faceted problems related to socioeconomic development. Leo is currently performing research in settings such as the Brazilian favelas, the Amazon rainforest, worldwide desalination plants, and African HIV/AIDS treatment clinics.
About HOSS:
The House of Sustainable Society (HOSS) is a multidisciplinary, multi-stakeholder, social science research center at the Stockholm School of Economics focused on creating knowledge and impact to promote more sustainable markets. Our aim is to develop rigorous knowledge around how markets can be effectively advanced to support the transition to sustainable development.
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