This paper describes three phases that cities go through for the delivery of municipal water and sanitation services, identifying the main political, technological, socio-institutional, financial, public health forces of disequilibria that push cities along this development path. Data from the Global Water Intelligence and the World Bank’s International Benchmarking Network show that most of the countries with utilities with limited piped water coverage (Phase 1) have an annual GDP per capita less than US$5000. In contrast, most countries with an annual GDP per capita greater than US$10 000 have close to universal piped water coverage (Phase 3). We find no statistically significant relationship between country-level water scarcity and the average water prices charged by utilities in a country. We discuss a comprehensive policy mix with four components that municipal water utilities need to address the growing water deficits as rising demands confront limited supplies: (1) reduction of nonrevenue water, (2) source diversification, (3) reduction of customer water use, and (4) establishment of financial reserves to address climate-related emergencies.
