An article by VoxDev on improving sanitation in low-income areas with research contributions from Center Director Molly Lipscomb.
Policy lessons from new advances in sanitation economics
It is well established that improved sanitation can lead to significant health improvements (Fewtrell et al 2005, Cumming and Cairncross 2016, Alsan and Goldin 2019, Galiani et al. 2005, Watson 2006, Kesztenbaum and Rosenthal 2017, Geruso and Spears 2018, Bhalotra et al. 2021, Augsburg and Rodriguez-Lesmes 2018, Pickering et al. 2015, Spears 2020, Pickering et al. 2015). However, achieving these health gains is all but straightforward. A review of the literature by Kresch et al. (2019) for example shows that common interventions targeted at households being the drivers of WASH improvements are often far less effective in improving health outcomes than previously hoped by many sanitation policymakers. Large impacts on, for example, child mortality tend to have been found only with large-scale and/or structural water and sanitation infrastructure investments and knowledge gaps remain as to when and how health impacts can be achieved. Two special issue contributions, Cameron et al. (2023) and Deutschman et al. (2023), shed light on mechanisms behind health impacts. Cameron et al. (2023) establish that the commonly implemented behavioural change intervention, Community-Led Total Sanitation (CLTS), is unlikely to have any health impact until community coverage of 50% is achieved: pooling data from four countries, they find increases in child health of 0.3 standard deviations once village sanitation coverage reaches 50–75%. There do not appear to be statistically significant gains beyond the 75% threshold. Deutschman et al. (2023) on the other hand show that privatisation of sewage treatment centres led to a reduction in diarrhoea rates among children in Dakar relative to other cities in Senegal, with the main effects following from increased productivity from the desludging operators based on their ability to complete more jobs during the days following privatisation.
Subsidies may ultimately be necessary to increase sanitation uptake, particularly among the poorest. Gautam (2023) demonstrates an untargeted price subsidy can be more cost-effective than targeted cash transfers in terms of increasing sanitation adoption overall, due to the significant externalities associated with sanitation provision. Untargeted subsidies can be costly, particularly as many households would participate without them. This work complements a recent study by Johnson and Lipscomb (2023), which shows that price discrimination in subsidised sanitation provision by the government or other authority can substantially increase take up and health improvements while minimising the budget required.
However, providing services at the household level, even when highly subsidised, may remain inadequate. To achieve welfare impacts and improve financing, the government’s most cost-effective investments may occur through changes at the government or supply side level rather than changes at the household level. Governments often operate the sanitation supply chain, but they may do so inefficiently. Deutschman et al. (2023) show that privatising sewage treatment centers increased legal sewage dumping by 74%. Additionally, households pay 5% less for sanitation services after privatisation, and diarrhoea rates among children decreased.