I agree with you though, privatization with the right amount of government regulation (while we may disagree on what ‘the right amount’ is) seems to be the solution, with, as the post above implies, more focus on privatization than on government.

So then the question becomes, how do we keep water privatized to boost efficiency while enforcing minimal health standards and access for all even if not profitable? It seems obvious to me that the answer is privatization with the right amount of government regulation.

This is discussed in the ‘Alex Tabarrok has more’ link, Alex Tabarrok writes,

In theory, water services are not an easy thing to privatize well because of natural monopoly problems and because some of the benefits of clean water are externalities. In practice, however, governments in developing countries do such a poor job at providing water that there are large potential gains to privatization even given such problems.

In other words, while privatization of water may not be perfect, it is better than the alternative, state-run water services.

http://www.cbc.ca/fifth/deadinthewater/argentina.html
http://www.guardian.co.uk/argentina/story/0,11439,1647532,00.html
http://www.globalpolicy.org/socecon/bwi-wto/wbank/2004/0226argwater.htm

I’m not a supporter of state-run utilities in Latin America because government bureaucracy and corruption run so rampant. But when we discuss alternatives, we should be more honest their actual results. Juan Arellano has an interesting report on the failures of water privatization in Peru.