Setting Priorities, Targeting Subsidies among Water, Sanitation, and Preventive Health Interventions in Developing Countries

This paper challenges the conventional wisdom that water and sanitation improvements and other preventive health interventions are always a wise economic investment. Costs and benefits are presented for six water, sanitation, and health programs—handwashing, sanitation, point-of-use filtration and chlorination, insecticide-treated bed nets, and cholera vaccination. Model parameters are specified for a range of conditions that are plausible for locations in developing countries. We find that the parameter values needed for such cost–benefit calculations are not available for setting global priorities. We reflect on the implications of our findings for more “evidence-based” planning of public health and development interventions.

This World Development article is in press  and available as pdf below and online http://www.journals.elsevier.com/world-development/recent-articles/World Development is a multi-disciplinary international journal devoted to the study and promotion of world development.Economists who do not work in water and sanitation and hygiene (WASH) and other preventive health interventions in developing countries will likely be surprised at the currentpolicy debates in this sector. Professionals in these fields are wrestling with three related puzzles that outside observers might well expect to have been resolved long ago.

First, although the health benefits from use of preventive health goods and services are purported to be high, demand for them is usually very low among households in developingcountries. Preventive health interventions which require single or occasional uptake, such as insecticide-impregnated mosquito nets (bed nets) and vaccines, have been shown to beeffective in saving lives and reducing general morbidity, as well as cost effective, yet household demand for these interventions has been found to be consistently low and price elastic(Kremer, Leino, Miguel, & Zwane, 2009; Whittington, 2010). Some of these technologies (e.g., home-based water chlorination and bed nets) have been around for decades, yet market penetration has been very slow (in sharp contrast to cell phones), perhaps because these interventions also involve significant disamenities (taste and odor problems, discomfortor inconvenience in use, etc.).

On the other hand, household demand for piped water services in developing countries is very inelastic (Nauges & Whittington, 2009), even though the health benefits from these services in developing countries are ambiguous and controversial (Bennett, 2010; Cairncross et al., 2010; Fewtrell et al., 2005; Waddington & Snilstveit, 2009). This may be because households value the time savings and privacy the services provide.