The Political Economy of Sanitation: An Exploratory Study of Stakeholder Incentives in Delivering Sanitation

Despite continued funding to increase access to safely-managed sanitation, progress is still lagging, especially within urban low-income communities. Mismatch of sanitation stakeholders’ incentives and bias in allocating funds toward the various sanitation services is a crucial barrier to sustainable and effective provision. This PhD thesis explores the incentives of sanitation stakeholders to allocate funds across the sanitation value chain (SVC). By building on political economy and institutional economics, the research explores how economic characteristics of sanitation interact with various views about the responsibility to fund sanitation. I use four qualitative case studies purposefully selected to investigate various service delivery arrangements within a variety of development contexts. Since large infrastructure receives substantial investments in the development sector, the first case analyses how incentives influenced the functionality of faecal sludge treatment plants in four small towns in Bangladesh. The case finds stakeholders’ lack of incentives toward less visible services, such as faecal sludge collection and transport, a barrier to sustainable service provision. The findings of this work led me to develop a more systematic approach to investigating incentives toward funding and providing each service along the SVC in the subsequent case studies. Since the development sector increasingly advocates for market-based sanitation, the second case examines the operations of Sanergy, a private provider of container-based sanitation in low-income settlements (LISs) in Nairobi, Kenya. The case sheds light on the mismatch of incentives of foreign services providers backed by philanthropist donors, the served population and governmental organisations. In addition, the role of the state in providing or supporting the private sector to provide sanitation is non-existent, potentially due to the lack of accountability to citizens and their inability to demand and advocate for their fundamental right to sanitation. The third case study investigates the public provision of sanitation in LISs in Cape Town, South Africa; it provides an opposite narrative of Kenya. For South Africans, dignified sanitation is a basic right the state must stipulate for all. Community-based organisations and local leaders have mobilised collective action for the state to provide public toilets, often of temporary nature, free of charge in LISs. However, such efforts do not extend to safe faecal sludge collection, transport, and treatment, undermining the sustainability of the offered services. External donors are not central in the first three cases. Therefore, the Gaza Strip, Palestine, was selected to explore how the incentives of various stakeholders, including external donors, play out in a fragile and donor-dependent context. Despite the limited domestic financial resources, external donors prioritise the capital costs of large new infrastructure - the downstream of the SVC (wastewater treatment) leaving behind unmet rehabilitation and operation needs to maintain these infrastructure and other upstream service in the SVC. Besides, donors’ selectivity in allocating funds undermines the recipient’s country autonomy and ownership of the provided services. I propose an extended political economy analysis (PEA) to understand the issue of stakeholders’ incentives in promoting equitable and sustainable sanitation services. This analysis creates a space to appreciate the complex nature of delivering sanitation services. It builds on institutional economics concepts to offer nuance investigation of the unique economic characteristics of sanitation and its impact on the incentives and views of stakeholders about the responsibility to fund and provide it. I do so by utilising the services characteristics framework developed by Batley and McLoughlin, which categorise service characteristics into: nature of good, market-related, task-related and demand-related characteristics. As sanitation entails heterogonous services, this study systematically analyses each segment of the SVC separately. For instance, excludability – the ability to deny non-payers from accessing a good or a service, and rivalry – when the consumption of a service by one individual subtracts its consumption from others (Cornes and Sandler, 1986), put sanitation on a spectrum of public and private goods. The nature of good, in turn, detracts or incentivises some stakeholders from using, producing, or providing it. Citizens in the LISs of Cape Town perceive toilets as a public good, taking how sanitation resonates with the country’s history of apartheid and colonisation. Citizens are unwilling to contribute and believe the state should provide it as per their constitutional right to free basic sanitation. While the same right is spelt in the constitution of Kenya, the state is not compelled to provide basic sanitation to LISs in Nairobi, where private providers offer a range of services for a fee. As this study finds that sanitation characteristics are not generalizable and, in turn, are perceived differently among the stakeholders and their context, it is vital to conduct an in-depth analysis of the context and the potential sanitation services to assess the prevailing narratives and incentives of each stakeholder to promote sanitation. Investigating stakeholders’ incentives to provide and fund sanitation beyond the ‘economic logical choice’ is the first step to unfolding and aligning stakeholders' incentives to deliver sustainable and equitable safely-managed services across the SVC.