The provision of adequate water and sanitation services is one of the most critical challenges faced by cities in the developing world. As rapid urbanization continues throughout South America, Asia, and Africa, local governments face growing challenges to absorb and provide even basic services to rapidly growing urban populations. The provision of water and sewer services ranks at the top of the list of services needed for survival in cities throughout the world; people simply cannot live in the congested areas that generate economic opportunity without a regular supply of water and a way to dispose of human waste.

Failure to provide basic water and sewer services creates a myriad of health risks and often prevents the poor from integrating with or contributing to the urban economy. While slum residents can be highly efficient contributors to local economic growth, failure to provide basic water and sanitation services often limits their ability to engage with that economy and to produce goods or services.

In addition, recurrent family illness is one of the prime anchors that pull poor households back into the poverty trap even after they have found places in the informal urban economy. In most developing countries, cities are losing this battle. While a few high-profile projects extend services to some long-established slums, hundreds of slum communities remain unserved, and new arrivals create new unserved slums every year.

After decades of focusing primarily on rural health and economic growth, the international donor community is now shifting part of its focus to cities. For decades, development theory has been dominated by two corollary assumptions: (1) that successful rural development could reduce pressure on cities, and (2) that city governments could find a way to serve their poor populations.

Both assumptions have proven wrong. First, it appears that even when rural development strategies are successful, rural-to-urban migration cannot be stopped. The young, the mobile, and the talented continue to seek out broader horizons in cities – just as they have across cultures and across millennia.

Second, most cities simply do not have the governance skills or financial resources to meet the growing demand. They may have more government institutions than rural communities, but they are plainly not up to the task of providing even basic services within their boundaries. In short, those who focus on reducing poverty in the developing world have had to shift more of their focus to cities because that is where an increasing share of the poor live – and that trend will continue.

While the failures of Asian, African, and Latin American governments to provide water and sewer services are clear, their role as a catalyst for sustainable solutions is only now being recognized. In fact, the key role of local governments in crafting and implementing “pro-poor” services is perhaps the most under-appreciated part of the complex urban water and sewer puzzle. The reason is that successful programs often involve local government working in partnership with NGOs or private entities; while the city government does not physically deliver the service, it is often instrumental in making it happen.

The building blocks of functional water and sewer systems are well known in the United States– appropriate design, sound financing, system-wide cost recovery, planning for maintenance and replacement, and competent daily management. But U.S. technical solutions often do not work in less developed countries. The challenge is to translate this knowledge into programs that work in the context of the imperfect governance skills, incomplete financial systems, and poor enforcement systems prevalent in many countries.

The key is not in transferring the technical design of American water and sanitation systems (in fact, our bias towards “piped” systems may not be an appropriate approach to slum sanitation in all cases), but in sharing our knowledge of how to empower both government and citizens to jointly find those water and sanitation systems that will work for them. Over the past decades, many donor-funded programs have focused on empowering citizens to engage, advocate, and demand better services, but empowerment of local government to respond to those demands has received less attention.

Keys to a Successful Approach
A successful approach to this daunting challenge should be firmly grounded in lessons that the development community has already learned about providing water and sanitation to the urban poor. At the broadest level, the urban poor are unable to access adequate water and sanitation services because existing incentives, institutions, and financing do not promote and support increased pro-poor service delivery.

Ironically, many informal Small Sewer and Water Providers (SSWPs) have overcome those obstacles – they have filled the gap in formal services by providing water to hundreds of thousands of slum dwellers every day, but at prices far higher than those paid by users of the Formal Sewer and Water Providers (FSWPs) and in ways that delay and discourage the expansion of reliable, lower-cost services from reaching the poor. At the broadest level, there are two ways to approach this problem:

• Increasing access for the urban poor through supporting SSWPs and integrating them with FSWP systems at the local level (a “place-based” approach)
• Increasing access for the urban poor through reform of the enabling environment (a “macro systems” approach).

Local Place-Based Solutions

While reforms at both levels are needed, there is a growing focus on “place-based” solutions. In the United States, reforms in water and sewer systems have moved upward from local success more often than they have flowed downward from national mandates—although state and federal reforms and mandates have shaped the evolution of these systems. More specifically, geology, hydrology, soils, and water sources vary locally, and most U.S. cities began their water and sewer services by using “whatever worked” in light of those constraints.

As they grew, systems were refined and expanded, threats to public health were removed, unsustainable and unreliable sources and providers were replaced, and larger investments were made to serve difficult topography. Smaller-scale providers were bought out or absorbed into broader, more reliable, and more sustainable systems over time. All that happened first because those steps were necessary to keep the water flowing and the waste disposed.

In the international context, too, solutions to water and sanitation problems need to be identified at the local level. Water and sewer provision are “place-based” problems – particularly in the flood-prone drainageways and difficult terrain where many slum communities are located – so the growing focus on place-based solutions is well founded.

“Pro-Poor” Design and Delivery

In addition, the development community has learned important lessons about how to design and deliver “pro-poor” public services. Experience from the Asian Development Bank and the World Bank’s Water and Sewer Program suggest six key lessons:

• Engage the poor from the very start
• Improve on what currently works for the poor
• Support community-level investment and community management
• Make pro-poor services financially sustainable and affordable
• Establish pro-poor incentives for service providers to scale up access
• Address any technical, administrative and institutional constraints.

The second of these lessons is very important, because improving on what currently works for the poor means working with the SSWPs that currently provide many of those services. The development community needs to abandon the belief that small, informal providers are part of the problem and find ways to make them part of the solution. The Asian Development Bank has identified four steps to achieve this goal.1

• Include SSWPs in the water supply strategies of governments and donors and in the water supply development plans of local authorities and water utilities
• Provide a conducive legal framework that recognizes and encourages greater longer-term investments by SSWPs (i.e., legalize them) within the context of private concessions and decentralization of services
• Build incentives for SSWPs to improve their services while respecting their core competencies
• Facilitate SSWPs’ access to financial resources to increase their capacity to invest in the sector and reduce their cost of capital.

Similarly, World Bank research with ten SSWPs in the metro Manila region led to three significant recommendations.2

• Find ways for SSWPs to reduce house connection fees as much as possible. Connection fees are the major factor keeping may poor households from accessing adequate service.
• Encourage transparent collaboration between SSWPs and FSWPs. SSWPs have a comparative advantage in delivering water to the poor and managing appropriate billing and collection methods. FSWPs have a comparative advantage in producing safe water in bulk at the lowest cost.
• Avoid regulation of SSWPs’ prices by encouraging competition instead, and by permitting FSWPs to offer bulk water discounts to SSWPs.

The success of these ground-level pro-poor strategies, however, will rely on support at the local government level. At a minimum, local government policy must advocate for full water and sewer services in slum communities on terms that are affordable for their residents (i.e., to adopt an explicitly pro-poor water and sewer policy).

The Key Role of Local Government
Both the locally varied nature of water and sewer systems and emerging lessons in pro-poor service planning point to a future of place-based solutions – and that points to the key role of local governments in improving these services. In general, SSWPs and FSWPs find it hard to cooperate with each other; the cloudy legal status of many slums makes it difficult for their residents to engage with FSWPs to obtain lower cost services; the cloudy legal status of some SSWPs makes it difficult for them to obtain financing to expand their services; and many micro-finance institutions and banks are unaware of viable business opportunities in lending for the expansion of water and sewer systems and connections.

Local governments relate to all these actors, and local government can provide the incentives to make them come together to provide better services on a sustainable basis. As local democracies mature, healthier, more affordable, and more reliable water and sanitation are at the top of many slum voters’ lists of what they want their elected government to provide, and they will increasingly elect those who can provide those services.

Place-based urban development demands a great deal from local governments. While the idiosyncrasies of local terrain and politics can be overlooked at the national level, they loom large at the local level. The focus changes from numbers to real people, but the solutions reached are correspondingly better tailored to local needs. Place-based solutions require local government skills focused on:

• Identifying community-based assets and understanding how they can serve as a foundation for improved services
• Promoting community-based planning and implementation
• Engaging with and respond to empowered citizens
• Entering into partnerships—sometimes with players in the larger system—to secure additional human and financial resources to implement programs and projects
• Creating new urban management structures and systems that better respond to the realities of place-based solutions.

While crafting workable place-based strategies can be more labor- and time-intensive than the development of national strategies, they are much more likely to be implemented and to be sustainable over the long run.

Notes

1. Reported in Chapter 12 of “Bringing Water to the Poor: Selected ADB Case Studies,” 2004.

2. Water and Sanitation Program, “The Experience of Small-Scale Water Providers in Serving the Poor in Metro Manila: Increasing Access,” January 2004.