Doing More with Less: Smarter Subsidies for Water Supply and Sanitation. World Bank, August 2019.
In this report, we explore the question of how scarce public resources can be used most effectively to achieve universal delivery of WSS services. To inform our discussion, we analyze subsidies in the sector, including their magnitude, their efficacy in achieving their policy objectives, and the implications of poor design.
We then provide guidance to policy makers on how subsidies can be better designed to improve their efficacy and efficiency in attaining their objectives. Finally, we discuss how to design a subsidy reform package that will have the best chances of success.
Message 1 – Current WSS Subsidies Fail to Achieve Their Objectives Due to Poor Design; They Tend to Be Pervasive, Expensive, Poorly Targeted, Nontransparent, and Distortionary.
Message 2 – The Current Poor Performance of WSS Subsidies Can Be Avoided; New Knowledge and Technologies Are Making it Increasingly Possible for Subsidies to Cost Less and Do More.
Message 3 – To Successfully Reform Subsidies, a Subsidy Reform Package of Four Complementary Elements (in Addition to Improved Subsidy Design) Is Required