Regulation of water and sanitation services: getting better service to poor people
This paper aims to provide practical guidance on how to evaluate regulatory arrangements and adapt them to be more conducive to expanding access and improving service to poor customers. It is part of a series of papers on output-based aid (OBA) approaches. OBA approaches to improving water and sanitation service can work in a wide variety of circumstances. Such OBA schemes require an understanding of the impact that existing regulatory arrangements have on water services to poor customers. The design of OBA schemes should therefore include an evaluation of the existing regulatory arrangements in order to identify what changes could potentially be made in order to get better services to poor people. If such changes can be introduced in the short term, the need for external subsidies may be greatly reduced as a result. If such changes are not forthcoming, because of political resistance or high social costs, OBA may be introduced but would need to be adapted to the existing regulatory arrangements (taking account of their limits) or used as a lever to bring about changes in those arrangements.