Historically, water scarcity has been understood to result from unfavorable climatological and hydrological factors. From this perspective, infrastructural solutions that augment water supplies, such as desalination, are seen as the way to overcome physical resource limits and resolve water scarcity. Drawing on theories of scarcity, risk perception, trust, and governance, we argue that past experiences with poor water quality and a long-standing mistrust of water providers create a particular mode of water scarcity: perceptual scarcity. This paper presents findings from household surveys conducted in two arid Latin American cities where large-scale desalination projects have been undertaken to provide potable water. While both projects use state-of-the-art desalination technology, our survey results indicate that the majority of respondents do not drink desalinated water from their taps and purchase bottled water instead. Our results show that, despite significant investments in infrastructure, respondents still lack an adequate supply of water that is perceived to be fit for human consumption. The two case studies provide empirical evidence that challenges the assumption that desalination technology will resolve water quality and water scarcity concerns. We conclude that institutional investments that promote a more reliable and trustworthy water governance system are as important as investments in physical infrastructure. (C) 2016 Elsevier B.V. All rights reserved.