Subsidies Can Improve Sanitation, Shows Study

By: Staff Reporter
A new study in Science found that subsidies may be the key policy.

With poor sanitation estimated to cause 280,000 deaths per year worldwide, improving sanitation is a key policy goal in many developing countries. Yet governments and major development institutions disagree over how to address the problem. A new study released in Science in April, 2015 found that in Bangladesh, a community-motivation model that has been used in over 60 countries to increase use of hygienic latrines had no effect. Yet latrine coverage expanded substantially when that model was combined with subsidies for hygienic latrines targeted to the poor.

The study, led by Raymond Guiteras of University of Maryland and James Levinsohn and Mushfiq Mobarak of Yale University, and implemented by Innovations for Poverty Action, tested three different approaches that are commonly used in the development sector for increasing the use of hygienic latrines. Reducing open defecation, which is still practiced by 15 per cent of the world’s population, is a key policy goal for this sector. The study was undertaken in northwest Bangladesh, in an area where 50 per cent of the population had access to a hygienic latrine before the study began.

Researchers randomly assigned 380 neighbourhood communities, to one of four groups. Villages either received a community motivation programme, subsidy vouchers with the community motivation programme, information and technical support, or none of the above. By comparing outcomes in latrine coverage, investment in hygienic latrines, and open defecation between the groups over time, researchers were able to compare the effect of the different approaches.

The subsidy vouchers, which were only provided to a random subset of households in the second group through a public lottery, could be redeemed for a 75 per cent discount on available models of latrines, priced (after subsidy) from 5 to 12 USD. The households were responsible for their own transportation and installation costs, and the richest 25 per cent of households were not eligible for vouchers. The community motivation programme, called the Latrine Promotion Programme (LPP), was modelled after ‘Community-led total sanitation’, which focuses on behavioural change and community mobilisation in eliminating open defecation.

Researchers found that the community motivation model alone did not significantly increase adoption of hygienic latrines or reduce open defection relative to the comparison group, nor did providing information and technical support to community members. However, the subsidy had substantial effects when coupled with the community motivation programme, increasing hygienic latrine coverage by 22 percentage points among subsidised households and 8.5 percentage points among their unsubsidised neighbours.

This suggests that latrine investment decisions are inter-linked across neighbours, and that there are positive effects on others of subsidising even a few households. People were more likely to invest if more of their neighbours received vouchers, pointing to a virtuous cycle where adoption of improved latrines spurs further adoption. Adding subsidies to the community motivation model also reduced open defecation rates by 22 per cent among adults in villages that received subsidies (including households that did not receive subsidies), relative to the comparison group.

These results counter the concern among many development practitioners that subsidies undermine intrinsic motivation. Rather, this research shows price is a primary barrier, which is consistent with a growing body of research on adoption of health products.

These results are especially useful as Swachh Bharat Abhiyaan is one of the top priorities of Indian government today.

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