State‐owned Enterprises: NWSC's Turnaround in Uganda

Abstract: Oversight agencies in the water sector emphasize performance monitoring based on outputs, such as customers served, volume delivered, and service quality. However, bureaucratic tendencies can curtail operational innovation and creativity. In situations where managers lack full operating knowledge and capacities, proactive and consultative monitoring and regulation can yield benefits. This study reviews the results of Uganda's National Water and Sewerage Corporation's (NWSC) approach to performance monitoring (and ‘self‐regulation’). The purpose of this study is to outline corrective actions undertaken by the NWSC Management and Staff to turn around performance, the sequencing of those steps, and the outcomes from this reform program. The NWSC focuses on promoting improvements in technical processes and input selection. Improvements in service quality and network expansion resulted from aligning performance improvement initiatives with the organization's financial performance and team development. The program's success required managing organizational rigidities and moving towards full cost‐recovery. In particular, organizational incentives and information flows encouraged managers to reduce rules and procedures that hindered strong performance. African proverbs are interspersed throughout the article to underscore key themes and lessons for those designing, implementing, and evaluating infrastructure sector reform initiatives.