This paper discusses the practical problems of implementing water policy and pricing reforms in
transition economies by looking at the case of Odessa, Ukraine. Chief among the policy advice for the
water and sanitation (W&S) sector in less developed countries is greater cost-sharing by customers through
increased service prices, with the goals of encouraging more efficient water use by users, promoting a
greater perceived stake among customers in the health of their W&S systems and enabling service providers
to maintain and expand their networks as needed.
While appropriate for much of the developing world, this
policy advice has had limited applicability for many communities in transition economies. The complex
existing water supply infrastructure in much of Central and Eastern Europe, along with residents’ low
effective demand for high-quality service, create an environment in which typical price reform strategies will
initially be a minor component in sector reform efforts. We use the case of Odessa, Ukraine, to discuss the
reasons why traditional advice on water pricing has been of limited use in the region.
