The Economics of Clean Water: A Guest Post
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.”
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.