This thesis addresses three questions: why has universal potable water access not been achieved with the water policy changes made in Bolivia between 1990 and 2000? What can be learned from the water policy changes implemented in Chile between 1980 and 1999? Finally, what changes can be made to both countries’ water policies to ensure the sustainable use of water resources? To answer these questions, this thesis reviews water policy changes in Chile as a result of World Bank loans before privatization in the 1980s and compare them to the water policy changes in Bolivia as a result of World Bank loans in the 1990s in the form of water privatization. I argue that water privatization is neither the solution to lack of water access nor the solution to water scarcity. Secondary sources were used to analyze the historical differences of water policy in Santiago, Chile and La Paz, Bolivia to see the effectiveness of privatization as a universal water provider and a solution to water scarcity. The results show that the water policy changes that were implemented in Santiago, Chile before privatization were more effective in supplying affordable water to citizens than the immediate privatization in La Paz, Bolivia. I also analyze the effectiveness of water privatization in both countries, as it pertains to the scarcity of water resources in each region. I argue that privatization of the water sector failed to prepare for water scarcity and I recommend institutional pluralism with sustainable water policy at the forefront as a solution to lack of water access and threat of water scarcity in Bolivia and Chile.