Leandro S. Pongeluppe

Abstract

We examine the comparative role of public versus private actors in addressing grand challenges through the adoption of desalination technologies that vary in sustainability dimensions. While prior research has explored how governments promote new technologies via supply-side (e.g., via subsidies), we explore public (versus private) actors’ role on demand-side (as clients). Using data on historical droughts and all desalination investments worldwide (1950s-2015), we find that, while private clients respond with more plants launched, public clients are associated with more energy-efficient technology choices. Crucially, this effect is contingent upon the institutional development of the countries. We further demonstrate how both sector investments are associated with negative externalities through environmental pollution. By highlighting sustainability trade-offs, we foster a better understanding of economic organizing for pressing societal issues.