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Equitable Access to Basic Utilities: Public versus Private Provision and Beyond

Equitable Access to Basic Utilities: Public versus Private Provision and Beyond

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Published by Ramona Ortega

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Published by: Ramona Ortega on Aug 01, 2009
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Poverty
Number 18, August 2009International Policy Centre for Inclusive Growth
Poverty Practice, Bureau for Development Policy, UNDP
Equitable Access to Basic Utilities:
Public versus Private Provision and Beyond
 
2
International Policy Centre for Inclusive Growth
 
FROM THE
EDITORS
 
P
roviding universal access to basic utilities is justified on human rightsgrounds and also because of the positive externalities involved. Adequateprovision of water, sanitation and electricity contributes to the achievement of theother Millennium Development Goals (MDGs). Access to these services, however,is still unequal in the developing world. Services do not adequately reach the poor. This
Poverty in Focus
brings together a mix of policy issues and some country experiences.
Degol Hailu and Raquel Tsukada
provide an overview of the broad challenges involvedin making access to basic services equitable and universal.
Hulya Dagdeviren and Simon A. Robertson
point out the difficulties of expanding utilitynetworks in slum areas, which include technical barriers and a lack of land and housingtenure. They make a case for stronger public interventions.
Kate Bayliss
argues that the allocation of demand and investment risks duringprivatisation in Sub-Sahara Africa is distorted. This is because the risks are borneby governments and end users instead of the private contractors.
David Hall and Emanuele Lobina
provide a critique of both the investment potentialof the private sector and cost recovery schemes in the provision of sanitation services.
 Ashley C. Brown
discusses the externalities involved in supplying basic infrastructure tothose who can least afford it. He argues that, contrary to established views, cross-subsidyschemes actually benefit all users and not only the targeted population.
 Alison Post 
emphasises the benefits of water metering but highlights problemsof implementation and poor design in Argentina.
Degol Hailu, Rafael Osorio and Raquel Tsukada
examine the reasons for the privatisationand then renationalisation of the water supply in urban Bolivia.
 Andre Rossi de Oliveira
explores water privatisation in Brazil. He argues that the expansionof coverage has stemmed mainly from high levels of investment by private operators.
Suani Teixeira Coelho, Patricia Guardabassi, Beatriz A. Lora and José Goldemberg
note thatgeographically isolated communities without access to electricity grids, such as thosein the Amazon, can be served by
 
renewable energy sources.
Luc Savard, Dorothée Boccanfuso and Antonio Estache
present the findings of a generalequilibrium model that assesses the impact of electricity price changes on thepoor in Mali and Senegal.
 Joana Costa, Degol Hailu, Elydia Silva and Raquel Tsukada
empirically show that waterprovision reduces the total work burden on women in rural Ghana.
Nitish Jha
conducts a sociological analysis of access to water and sanitation in India,emphasising the challenges encountered in community-based schemes.
 Julia Kercher 
explains why and how a human rights framework must guidethe design and implementation of private utility provision.We hope that this collection of articles will contribute to the discussionof how to provide vital infrastructure services more equitably. This
Poverty in Focus
is the result of an International Workshop on Equitable Accessto Basic Services held on 5 December 2008 in São Paulo, Brazil. IPC-IG and theDavid Rockefeller Centre for Latin American Studies at Harvard University (DRCLAS) jointly organised the workshop. We gratefully acknowledge DRCLAS’ contribution.
The Editors
Poverty in Focus is a regular publication of the
International Policy Centre for Inclusive Growth
(IPC-IG). Its purpose is to present the resultsof research on poverty and inequality in thedeveloping world. Support is provided by the Swedish International Development Cooperation Agency (Sida).
Editors
Degol Hailu and Raquel Tsukada
International Advisory BoardDesktop Publisher
Roberto Astorino
Copy Editor
Andrew CrawleyFront page:
Photomontage by Rosa MariaBanuth. It includes photos by Christian Lehmann,Raquel Tsukada, Steve Ford Elliott, Erik Araujo andBruno Spada from the Ministry of SocialDevelopment and the Fight Against Hunger, Brazil.IPC-IG and the Editors thank all for grantingpermission of use.
Editors’ note:
IPC-IG and the editors are gratefulfor the generous contributions, without anymonetary or material remuneration, by all theauthors of this issue. We also would like toacknowledge the support of the Brazil Office of DRCLAS at Harvard University; special thanks goto Jason Dyett and Lorena Barberia.
IPC-IG
is a joint project between the UnitedNations Development Programme and Brazil topromote South-South Cooperation on appliedpoverty research. It specialises in analysingpoverty and inequality and offering research-based policy recommendations on how to reducethem. IPC-IG is directly linked to the PovertyGroup of the Bureau for Development Policy,UNDP and the Government of Brazil.IPC-IG Director (a.i.)
Degol HailuInternational Policy Centre for InclusiveGrowth
(IPC-IG), Poverty Practice,Bureau for Development Policy, UNDPEsplanada dos Ministérios, Bloco O, 7º andar70052-900 Brasilia, DF Brazilipc@ipc-undp.orgwww.ipc-undp.org
The views expressed in IPC-IG publications are theauthors’ and not necessarily those of the UNDP or the Government of Brazil.
Rights and Permissions
– All rights reserved. The text and data in this publication may bereproduced as long as written permission is obtainedfrom IPC-IG and the source is cited. Reproductions forcommercial purposes are forbidden.
Oscar Altimir
, CEPAL, Santiago de Chile
Giovanni A. Cornia
, Università di Firenze
Nora Lustig
, Universidad Iberoamericana, Mexico
Gita Sen
, Indian Institute of Management, Bangalore
Anna Tibaijuka
, UN Habitat, Nairobi
Philippe van Parijs
, Université de Louvain*
We express our sincere condolences on the recent passingof Professor Peter Townsend, who was a member of theAdvisory Board.
 
Poverty in Focus
 
August 2009
3
More than 1 billion peopleglobally are living inextreme water deprivation.Over 40 per cent of theworld’s population alsolack access to safe andclean sanitation services.About 1.6 billion peopleworldwide do not haveaccess to electricity. Of these,706 million are in South Asiaand 554 million in Africa.While access to basicservices should be a humanright, it is also a publicgood with numerouspositive externalities.The policy challengethat developing countriesface is to increase thepoor’s access to utilitieswhile simultaneouslyreaping the benefits of the positive externalities.
The Millennium DevelopmentGoal (MDG)
for water is to halvethe proportion of people withoutaccess to safe drinking water by 2015. The urgency of meeting this targetis reflected in the UNDP’s
HumanDevelopment Report 2006
,
 
which warnsthat more than 1 billion people globallyare living in extreme water deprivation.Over 40 per cent of the world’spopulation also lack access to safe andclean sanitation services. The report alsonotes that “not having access to waterand sanitation is a polite euphemism fora form of deprivation that threatens life,destroys opportunity and undermineshuman dignity” (UNDP, 2006, p. 5).Similarly, about 1.6 billion peopleworldwide do not have access to electricity.Of these, 706 million are in South Asiaand 554 million in Africa, despite largemining and industrial conglomeratesenjoying cheap access to an enormoussupply of electricity (see McDonald, 2009). The figures indicate how inequitableis access to basic utilities, both acrossand within countries.Communities with the least access toutility infrastructure often live in slumdwellings and remote areas. Rapidurbanisation and informal settlementspose particular problems for waterprovision. As Hulya Dagdeviren andSimon Robertson report, the numberof residential water connectionshas fallen in most unplanned urbansettlements in the past decade. The authors also highlight theobstacles that large-scale privateproviders cannot resolve withoutimposing exorbitant tariffs to cover costs. Those obstacles are two-fold in origin.First, technical difficulties such as thetopographical location of informalsettlements pose physical challenges.Second, lack of tenure for land andhousing creates uncertainties. In thesecases, market-oriented policies are notappropriate means of providing accessto water in the slums of the developingworld. They note that “there are seriousdoubts about the potential gainsof both privatised network utilities(where planning and developmentchallenges persist) and small-scale serviceproviders (because of pricing and qualityissues). Ultimately, these concerns can beresolved by investing in the expansion of the public water and sanitation network.”While access to basic services shouldbe a human right, it is also a publicgood with numerous positiveexternalities. The impact on the otherMDGs, for instance, is clear. Makingwater, sanitation and electricityavailable empowers women by freeingthem from the burden and dangers of carrying water, often over long distances,and allows them more time to attendschool. As Joana Costa et al.
 
show, theprovision of utilities in rural Ghanareduces the burden of unpaid work.In addition, for women already engaged inremunerated activities, work time seemsto have increased, which in turn hasa gender-empowering impact. Theystress that “additional public policiesare needed to achieve that goal[reducing work burden], especiallypolicies related to educational trainingand childcare facilities”. The policy challenge that developingcountries face is to increase the poor’saccess to utilities while simultaneouslyreaping the benefits of the positiveexternalities. For the past two decades,policy has focused mainly on privateinvestment and foreign capital. Just as the“market failure” argument gave rise topublic ownership of certain enterprises,so the “government failure” reasoningpaved the way for privatisation. Thelatter was supported by developmentsin economics, which emphasised public
Equitable Access toBasic Utilities:An Overview
by Degol Hailu and Raquel TsukadaInternational Policy Centrefor Inclusive Growth

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