The sustainability or reversal of public-private partnerships (PPPs) in water services in Latin America have traditionally been linked to the nature of the incentives offered to private operators. However, the variety observed in both contractual choices and ulterior adjustments suggests that the incentives are themselves embedded in wider institutional and political legacies. This paper argues that distinct institutional frameworks, including a veto option for local actors and the Weber-derived dimension of the central administration, shaped largely gradual reform strategies for water services. These strategies, in interaction with the politicization of local society, in turn favored privatization sustainability when gradual, and privatization reversal when abrupt.