1. +
Network Bargaining &
Bolivian Water Privatization
Cohort B – Team 6
Jordan Young, Kerri Marshall, Ryan Chapman, Sieu Moi
Ly, Simon Edwards

2. +
Overview
Aguas del European
Tunari Union
World Bank Bechtel
Government
of Bolivia
Water International
Consumers Water Ltd.
International
Monetary United
Fund Nations
Coordinador
a de Defensa
del Agua y
de la Vida

3. +
Key Terms & Concepts
Actor • A participant in a bargaining process
Network Bargaining • A bargaining situation involving more than two actors
Network Bargaining Power • A model developed by Nebus and Rufin to predict the
Model outcome of network bargaining processes
SEMPA • Cochabamba, Bolivia’s water utility
Aguas del Tunari • Subsidiary of International Water Limited
La Coordinadora de Defensa • Bolivian coalition formed to protest the privatization of
del Agua y la Vida Cochabamba water system
Nation States • National Government
• A corporation that manages/provides services in more
Multinational Enterprise (MNE)
than one country
Non-governmental • A non-profit, voluntary citizens’ group organized on a
Organization (NGO) local, national or international level
Multilateral Organizations • Independent countries working together on issue (s)

4. +
Network Bargaining Power (NBP)
Model
 Builds on network theory to offer insights on the effects of:
 Coalitions, strategies of less powerful actors leveraging more powerful allies;
 Integration of international and domestic politics and;
 Applicability to MNE related issues.
 Actors in international bargaining include:
 Nation states,
 MNEs,
 NGOs, and
 Multilateral organizations.
 Actor bargaining influence considers
 Basis of power,
 Network position,
 Bargaining outcome preferences, and
 Motivation to influence bargaining.

5. +
Historical Background
Rampant Poverty Massive Water Civil
In Bolivia Tariff Increases Disobedience
1950-1980 1999 2000 (February)
Intervention Cochabamba Arrest of Oscar
Programs Water System Olivera
1950 - 1980 Privatized 2000 (April)
1999
Intervention
Program
Collapse ESAF Published Termination of
1998 Water Contract
1981
April 10, 2000
Stabilization Sanchez
Program Administration
1985 1993-1997

6. +
Actors in Bolivian Water
Privatization
Basis & Extent of Power
“Actors” who are Relationship to other
Preferences (Economic, legal, political,
Stakeholders “actors”
and knowledge)
Water Consumers in Cochabama, Affordable, Safe Drinking Water General Public, Agricultural and Strong Political
Bolivia Industrial water customers Weak Economic, Legal,
Knowledge
Multinational Enterprises
Aguas del Tunari Privatization – “operate systems “a subsidiary of the consortium of Strong Expertise, Knowledge
where consumers meet the London-based International Water Moderate Political
expenses of running the systems Ltd. and San Francisco-based Weak – Legal
and pay enough for company Bechtel Corp.”
profits”
Betchtel Privatization at a profit San Francisco-based company Strong – Expertise, Knowledge
Moderate Political
Weak - Legal
International Water Ltd. Privatization at a profit London based multinational Strong – Expertise, Knowledge
corporation Moderate Political
Weak - Legal
Nation States
Bolivian Government “sold SEMAPA with support from Was pressured by the World Bank Weak Economic, Knowledge
the World Bank and IMF and and IMF to sell its public water Strong Political, Legal
according to “The Policy system. Lacked capacity to
maintain infrastructure.
Framework Paper for 1998 – 2001
intends to privatize all remaining
public enterprises”.

7. +
Actors in Bolivian Water
Privatization – cont’d
Basis & Extent of Power
“Actors” who are Relationship to other
Preferences (Economic, legal, political,
Stakeholders “actors”
and knowledge)
Multilateral Organizations
International Monetary Fund Privatization with full cost recovery Worked with the World Bank in Very Strong Economic
(IMF) rather than investing in infrastructure pushing the Bolivian Government to Strong Political
funding sell its public water enterprise Moderate Knowledge, Legal
company, SEMAPA. Leveraged
position of funding.
World Bank Prefer “management of resources Working jointly with IMF to push Very Strong Economic
through private rather than the through privatization. Leveraged Strong Political
development of infrastructure” position of funding over local Moderate Knowledge, Legal
government.
European Union Pro-foreign private investment. Prior to Supports Privatization and foreign Moderate
2010 EU made it clear their “intension to investment
expand the role of private sector
involvement in water, and specifically to
help EU private sector water companies
expand into developing countries.”
Non-Government Organizations (NGO)
Coordinadora de Defensa del A coalition in defense of water which led Oscar Olivera was the protest Very Strong Political
Agua y de la Vida. a major campaign against a Bechtel leader (a long time labour leader – Weak Economic, Legal
subsidiary in Bolivia. Mandate was to was ultimately recognized with 2 Moderate Knowledge
awards for his efforts)
“develop a water system that relies upon
neither the government nor
transnational corporations.”

8. +
Network Analysis
Multilateral
Bolivian Organizations
Government (IMF, World Bank,
European Union)
Water
Consumers
Multinational
NGOs Organizations
de Defensa del (Betchtel, Aguas
Agua y de la de Tunari,
Vida. International Water
Ltd.)
Bolivia Multinational

9. +
Model Prediction
Bolivian Bolivian
Government People

10. +
Conclusion
Institutionalist Realist