The Economics of Clean Water: A Guest Post

INSERT DESCRIPTIONDavid Zetland

David Zetland is the S.V. Ciriacy-Wantrup Postdoctoral Fellow in Natural Resource Economics and Political Economy at U.C. Berkeley. He writes about the economics of water on his blog aguanomics and has recently appeared on Forbes.com and Fox Business News, discussing America’s “water crisis.” He has agreed to guest blog here this week. This is his first of two posts.

Potability, Politics, and Pipes

By David Zetland

A Guest Post

In 2000, the United Nations declared an intention to reach eight Millennium Development Goals (MDG’s) — each with one or more targets — by 2015. The MDG’s are attracting a lot of money, but money can’t fix everything.

Since I’m a water guy, I’ll explain how money may not work by looking at Target 3 of MDG 7:

Halve the proportion of the population without sustainable access to safe drinking water and basic sanitation.

Let’s begin with some baseline figures: According to the U.N., 78 percent of the world’s population had access to improved drinking water sources in 1990. As of 2004 (most recent data), that share was 83 percent. (For sanitation, the figures are 49 percent in 1990 and 59 percent in 2004, but let’s ignore this sub-target for now. Let’s also ignore the 1990 baseline for a program that began in 2000.)

But wait, did you notice the discrepancy? The goal being measured and pursued (improved drinking water sources) is not the originally proclaimed goal (sustainable access to safe drinking water). This discrepancy is no accident. Rather, it reflects the difference between the ambitions of development activists (safe and sustainable) and the realities of development bureaucrats.

Since “safe” is hard to measure, bureaucrats use the presence of “improved drinking water supplies” as a proxy for water quality — and they quantify that by counting pipes, pumps, and faucets. Their treatment of sustainable is even worse: “Sustainable access is currently not measured for reasons of a lack of common understanding [of] what constitutes sustainable access and how to reliably measure it [on a] global scale.”

Oops.

As Peter Drucker once said: “what gets measured gets managed.”

We know that thousands of well-meaning people will be spending billions of dollars to install pipes, pumps, etc. Will those pipes deliver safe and sustainable water? We can’t be sure about that result — since it’s not being measured — but we can be sure that projects that deliver pipes will get funded, bureaucrats who deliver 100 percent pipe coverage will be lauded for helping the poor, and outsiders are likely to confuse 100 percent pipe coverage with 100 percent access to “safe and sustainable” drinking water.

Bureaucrats will declare victory, outsiders will applaud, projects will wrap up, money will disappear, and those unlucky enough to have pipes with unsafe and unsustainable water will be left to their own devices.

So has the international development community tried to avoid such an ineffective and wasteful outcome? No. Instead, it has pressed for enough money to install pipes everywhere. Perhaps the most famous proponent of this “solution” (besides Bono) is Jeffrey Sachs, who consistently calls for more money to be poured into MDG’s and international aid.

Is it possible, however, that money spent on pipes will help? Perhaps yes but probably not. Effective water management requires good institutions — i.e., a framework for the formation and enforcement of local rules and norms that will deliver safe and sustainable local supplies. After all, how useful is a well without a means of allocating its water or maintaining its flow? How safe are pipes when they carry water of unknown quality? How sustainable is supply from an overdrafted aquifer?

The trouble with Target 3 of Goal 7 (and other targets, you can be sure) is not just that it has been reinterpreted to meet the needs of bureaucrats (rather than the poor), but that its proponents think that money alone can deliver results.

Bottom Line: MDG warriors, by emphasizing money over institutions, are unlikely to deliver safe and sustainable water. Hopefully, we won’t have to wait until 2015 for them to learn that.

Leave A Comment

Comments are moderated and generally will be posted if they are on-topic and not abusive.

 

COMMENTS: 42

  1. Jeffrey says:

    As Zetland points out, most international development projects are this way. We spend millions and millions, and much of it goes to bureaucrats and US/European consultants. That’s not to say we shouldn’t have such programs–we just need a massive adjustment in how they’re administered. I fear politics will win out, though, and policies will suffer as a result. Par for the course in 202.

    Thumb up 0 Thumb down 0

  2. Lee says:

    Water is one of the essential requirements to sustain life and a very basic one at that. It is something that is taken for granted in developed countries but a fundamental issue in most developing countries. My experience is in agriculture but I have seen the impact of water quality in rural areas which suffer from malaria, dysentery and other water-related diseases. This leads to a chain reaction of disease, low productivity and economic stagnation. The issues are local and need to be addressed locally not mandated from a centralized authority.

    The other problem related to this issue is water use for irrigation. Once irrigation is available, farmers switch to cash crops which means less biodiversity and dependence on trade for food supply. It is myopic and short-sighted to emphasize only one aspect of the issue and not see the interrelationship of health, economic development and sustainability. The problem will not get any attention until it reaches a critical point and remedial measures takes priority over preventative ones which in most cases are more cost-prohibitive and ineffective.

    Thumb up 0 Thumb down 0

  3. M Todd says:

    Of course the easier and more direct solution is to start drilling wells for local groups. The UN and the government will waste much of the resources because they think in large dollar projects that are susceptible to corruption.

    Here is a simple solution that works. My wife became aware of charitywater.org who decided to do something about the fresh water problem in the third world. Drill wells. One well on the average will supply about 500 people. The cost ranges from 4K to 12K to drill depending on the local and depth.

    To date they have drilled over 250 wells with the money to drill 300 more. The organization was started by a NY club promoter who visited Africa as part of a hospital ship. All the money collected goes to drilling wells. The cost of administration is covered by a private individual.

    It only proves that you do not have a big budget, or thousands of people to do big things. Most donations are 20 dollars, but together thousands of people make a difference, without waiting for the UN to do something.

    Thumb up 0 Thumb down 0

  4. JGunn says:

    The comment about drilling more wells does not address the problem of water quality or sustainability.

    I’m no expert in water, but I do have a lot of experience with monitoring and evaluation of projects in developing countries, and am also dismayed at the sloppy adoption of “measurable indicators” that are convenient for the bureaucrats but miss the mark in all other respects. The bureaucrats and donors are lazy and want to tick boxes rather than figure out whether we are really making progress toward meaningful goals. What to do? Sound monitoring and evaluation isn’t cheap or easy.

    Thumb up 0 Thumb down 0

  5. Jamie F. says:

    The point that building pipes is not enough is harder for some people to latch on to than you might expect. Mr. Bono and Mr. Sachs, etc.

    Maybe it would be helpful to contrast supply of other services like internet access (fungible, infinite supply) to the supply of water.

    Thumb up 0 Thumb down 0

  6. JJE says:

    Hi Stephen,

    Great points. Thanks for the piece. How about taking on the elephant in the room domestically — which is that all the toxics that we create and literally pour down the drain, we expect to be removed. But, tests for the the materials we put in our drains are not used in water treatment. So, is the water really safe? Or just “safe” given our current and limited methods of measuring it? This is similar to what you’re talking about above. The desirable outcome is not measurable, so we substitute the nearest most readily accessible data as a proxy, which in the public’s mind is the same.

    I think eventually we are going to have to grapple with addressing toxics on the front end. That is, some toxic materials literally can’t be manufactured unless they can be verifiably removed in water treatment facilities. Do we really want to just run a massive experiment in low-dose exposures to toxics on all Americans? Seems like that’s what we’re doing. Love to hear your thoughts on this.

    Thumb up 0 Thumb down 0

  7. steve pesce says:

    I can’t help but think that an article like this should reference Ralph Nader who has fought this battle (along with higher fuel standards and workplace conditions) for 50 years.

    Thumb up 0 Thumb down 0

  8. R.C. says:

    Interesting topic. I liked your point about how institutions redefine their goals to fit the results that they are capable of creating (e.g. “we can build pipelines, so let’s just make more pipelines the goal.” A few questions/comments for you:

    1. Why can’t water quality be measured as well?

    2. Won’t your suggestion — implementing a local framework of rules and norms for clean water — require money?

    3. Although water pipes alone do not equal clean water, are they not necessary for providing clean water to cities? Do you believe that water pipes are only part of the solution (and incorrectly being used as a barameter of success), or that they are entirely irrelevant?

    Thanks.

    Thumb up 0 Thumb down 0