Water monopoly = good?

I'm speechless...

Tyler Cowen, a George Mason economist and co-author of a blog over at Marginal Revolution, recently wrote an article for Forbes.com. You can read it here.

At first, I was appalled. I thought Cowen was arguing that all water should be monopolized. Then I realized Cowen was only referring to piped water, which most poor Africans do not have access to because they lack the infrastructure for it. Of course, this is exactly Cowen's point; a monopoly would create a financial incentive for companies to come into Africa and invest in pipes to carry water. Currently, there is no such incentive because governments institute price ceilings and do not allow companies to cut off water to customers. Although the governments clearly have their hearts in the right place, they do not understand the economics of their policies. Under such conditions, there is no incentive for businesses to want to supply water because it is extremely unprofitable to invest in the necessary infrastructure (e.g. piping) and charge low rates to customers that will often not pay at all.

And although a monopoly will mean artificially high prices, at least this way, companies would be willing to come to Africa and supply water because they could charge monopoly prices and make a profit. Therefore, more Africans would have access to clean, sanitary drinking water. And if they cannot afford the water? Then they can do what they are already doing (for the most part): fetch water by hand. Considering the current situation, maybe this is an idea worth pursuing after all...