TY - JOUR AU - Cutler, David AU - Miller, Grant TI - Water, Water, Everywhere: Municipal Finance and Water Supply in American Cities JF - National Bureau of Economic Research Working Paper Series VL - No. 11096 PY - 2005 Y2 - January 2005 DO - 10.3386/w11096 UR - http://www.nber.org/papers/w11096 L1 - http://www.nber.org/papers/w11096.pdf N1 - Author contact info: David M. Cutler Department of Economics Harvard University 1875 Cambridge Street Cambridge, MA 02138 Tel: 617/496-5216 Fax: 617/496-8951 E-Mail: dcutler@harvard.edu Grant Miller Center for Health Policy/ Center for Primary Care & Outcomes Research Stanford University 615 Crothers Way Stanford, CA 94305-6006 Tel: 650/723-2714 E-Mail: ngmiller@stanford.edu M1 - published as David M. Cutler, Grant Miller. "Water, Water Everywhere. Municipal Finance and Water Supply in American Cities," in Edward L. Glaeser and Claudia Goldin, editors, "Corruption and Reform: Lessons from America's Economic History" University of Chicago Press (2006) AB - The construction of municipal water systems was a major event in the history of American cities -- bringing relief from disease, providing resources to combat fires, attracting business investment, and promoting development generally. Although the first large-scale municipal water system in the United States was completed in 1801, many American cities lacked waterworks until the turn of the twentieth century. This paper investigates the reason for the century-long delay and the subsequent frenzy of waterworks construction from 1890 through the 1920s. We propose an explanation that emphasizes the development of local public finance. Specifically, we highlight the importance of municipal bond market growth as a facilitator of debt finance. We argue that this explanation is superior to others put forward in the literature, including disease knowledge, the presence of externalities, municipal population density, natural monopoly, contracting difficulties, corruption costs, and growth in the supply of civil engineers. ER -