WSP Political Economy of Sanitation

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Water and Sanitation Program: Technical PaPer

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WSP Sanitation Global Practice Team

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Te ndings, interpretations, and conclusions expressed herein are entirely thoseo the author and should not be attributed to the World Bank or its aliatedorganizations, or to members o the Board o Executive Directors o the WorldBank or the governments they represent. Te World Bank does not guarantee theaccuracy o the data included in this work. Te boundaries, colors, denominations,and other inormation shown on any map in this work do not imply any judgmenton the part o the World Bank Group concerning the legal status o any territoryor the endorsement or acceptance o such boundaries.

he material in this publication is copyrighted. Requests or permission to

reproduce portions o it should be sent to [email protected] . WSP encouragesthe dissemination o its work and will normally grant permission promptly. Formore inormation, please visit www.wsp.org .

Water and Sanitation Program


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Tis report presents the results o a Global Economic andSector Work (ESW) Study on the Political Economy oSanitation in Brazil, India, Indonesia, and Senegal that wasconducted by the Water and Sanitation Program (WSP) andthe World Bank. Te purpose o the study is to help WSPand the World Bankthrough a better understanding o thepolitical economy o sanitationin their eorts to supportpartner countries and development practitioners in the de-sign, implementation, and eectiveness o operations that

aim to provide pro-poor sanitation investments and servicesto improve health and hygiene outcomes.

Tis synthesis report was prepared by Sabine Garbarino andJeremy Holland (Oxord Policy Management), with SimonBrook, Ken Caplan and Alex Shankland (OPM consultants).Te background literature review, the research strategy, andthe report were authored by Jeremy Holland and SabineGarbarino, who also led the case studies or India and Sene-gal, respectively. Kit Nicholson and Jeremy Colin providedvaluable contributions to the research design. Te case study

or Brazil was led by Alex Shankland and Ken Caplan, andthe Indonesia case study was led by Simon Brook. Te casestudies beneted rom vital support rom national sanitationexperts and researchers, namely, Ivan Paiva, Klaus Neder,Hernn Gmez Bruera, and Luciana Lupo (Brazil); PadmajaNair (India); Risang Rimbatmaja and Prathiwi Widyatmi(Indonesia); and Ousseynou Gune (Senegal).

Te study was conceptualized and nanced by the WSPSanitation Global Practice eam and the World Bank. Teauthors carried out their work under the leadership o Eduar-

do A. Perez (Senior Sanitation Specialist, WIWP, WSP),Sabine Beddies (Senior Social Scientist, MNSSO, WorldBank), and Pete Kolsky (Senior Water and Sanitation Spe-cialist, WIWA, World Bank). Input was provided by ina

Soreide (Economist, FEU, World Bank) and Daniel AlbertoBenitez, (Senior Economist, FEU, World Bank). Guidance atthe Concept Note stage was provided by the ollowing Banksta: Eustache Ouayoro (Country Director, LCCH), JunaidAhmad (Sector Manager Urban and Water, AFUW), andMeskerem Brhane (Senior Urban Specialist, MNSUR).

WSP and World Bank colleagues actively contributed to thecase study design and reviewed the drat country case studies.

Tese include Joseph Ravikumar (Senior Water and Sanita-tion Specialist, WISA), J. V. Raman Murthi (Water Institu-tions Development Specialist, WISA), Soma Ghosh Moulik(Senior Institutional Development Specialist, SASDU),Pierre Boulenger (Senior Water Supply Specialist, WIAF),Ousseynou Diop (Senior Water and Sanitation Specialist,WIAF), Isabel Blackett (Senior Water and Sanitation Spe-cialist, WIEA), Martin Gambrill (Senior Water Engineer,SASDU), Carlos Velez (Lead Economist, LCSUW), TadeuAbicalil (Senior Water and Sanitation Specialist, LCSUW), Juliana Garrido (Inrastructure Specialist, LCSUW), and

Abel Mejia (Sector Manager, WIWA).

Te peer reviewers were Ede Ijjasz-Vasquez (Sector Manager,EASCS), Ivo Imparato (Senior Urban Specialist, LCSUW),and Ed Campos (Advisor, WBIGV). Written comments werereceived rom Verena Fritz, Governance Specialist, PRMPS).Alice Poole (Extended erm Consultant, PRMPS) providedcomments during the review meeting.

Funding or the study came rom the Multidonor rust Fundso WSP, the Sanitation Hygiene and Wastewater Support

Services (SWA) o the Water Partnership Program o theWorld Bank, the German Poverty and Social Analysis rustFund, the Social Development Department (SDV), and theFinance, Economics and Urban Dept (FEU).

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According to the Human Development Report 2006(UNDP2006), 2.6 billion peopleabout hal o the worlds po-pulationlack access to basic sanitation. Tere is ongoingconcern that governments, at many levels, are not devotingenough attention and resources to sanitation services, par-ticularly when compared to spending on water supply andother inrastructure services. Additionally, existing sanitationinvestments and service provision rarely place sucient stressupon the distinct and urgent needs o the poor. Recent WorldBank research shows that this limited ocus on sanitationis driven largely by political motivation in the context ocompeting demands or resources, and to a lesser extent bytechnical or economic considerations.

Tis global study on the political economy o sanitationin Brazil, India, Indonesia, and Senegalconceptualizedand nanced by the Sanitation Global Practice eam othe Water and Sanitation Program (WSP) and the WorldBankattempts systematically to understand and thus helppractitioners manage the political economy o pro-poor sani-

tation investments and service provision. It aims to providepractical advice to World Bank ask eam Leaders and othersanitation practitioners to help them better manage stakehol-der relations and eectively maneuver within the complexinstitutional relationships o the sanitation sector in orderto enhance the design, implementation, and eectiveness ooperations that provide pro-poor sanitation investments andservices. Te ultimate goal is to improve health and hygieneoutcomes.

Tis study ollows current approaches to political economyinterdisciplinary inquiry drawing upon social and political

theory and economic principlesto understand how poli-tical actors, institutions, and economic processes infuenceeach other. Te political economy o sanitation, thereore,reers to the social, political, and economic processes andactors that determine the extent and nature o sanitationinvestment and service provision.

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Tis studys conceptual ramework combines a diagnosticcomponent with a typology o actions to help translateanalytical ndings into more eective support to operationsand investments. Te Diagnostic Framework aims to identiypolitical economy constraints as well as opportunities thatare entry points or subsequent operational actions. It doesthis by ocusing on understanding country context, the sec-tor arenainstitutions that shape stakeholder relationships,

interests, and infuenceand the sector process, which looksat inormation fows, public debate, coalition building, andparticipation over time. Te Action Framework illustratesoperational implications and practical advice to ask eamLeaders and practitioners to support sector investments. Itdemonstrates how an analysis o the political economy osanitation can be translated into project design and action tobetter meet the sanitation needs o the poor. Te Action Fra-mework includes recommendations to improve the timing,tailoring, and sequencing o support to sector investment,inormed by an understanding o the relevant institutional

constraints and opportunities as well as key participants inthe sanitation sector. Te Action Framework urthermorestresses the importance o strengthened relationships o ac-countability among citizens, civil society organizations, andgovernment and other service providers. Finally, a partners-hip strategyoten linked to an inclusive communicationsstrategy and measures to oster public debateprovidesopportunities to overcome institutional constraints andstakeholder opposition to pro-poor sanitation investmentand service provision.

Te study was conducted through a qualitative analysis o

stakeholders, institutions, impacts, risks, and opportunitiesthat was linked to processes and policy debate. Tis SynthesisReport is based on the ndings rom the secondary literaturereview and the results o primary research in the our casestudy countries, which examined how each had identiedand managed political economy risks and opportunities in

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its sanitation interventions. Te our country case studieswere chosen purposively by the World Bank/WSP team andrepresent a range o sanitation contexts. Te Brazil case studyanalyzed the national-level political economy dynamics o

urban sanitation investment over the lietime o the Waterand Sanitation Sector Modernization Project (known inBrazil as Programa de Modernizao do Setor Saneamento,PMSS). In addition to this national (policy) component, thecase study includes a regional (program) component thatocused on the Bahia Azul program, implemented by theBahia state utility, Empresa Bahiana de guas e Saneamento(EMBASA), in the Salvador Metropolitan Region in nor-theastern Brazil. Te India case study looks at the politicaldrivers or the success o the otal Sanitation Campaign(SC) in rural Maharashtra, contrasting it with earlier, ailedattempts to implement SC in most o the countrys states.

In Indonesia the analysis ocused on the reasons behind therecent increase in government interest in urban sanitationprovision. While this interest has not yet translated intoincreased investment levels, it constitutes a major shit romthe previous understanding that sanitation is a private matteror households. Finally, the Senegal case study took the waterand sanitation reorms at the end o the 1990s as the startingpoint o the analysis and explored political economy actorsthat explained the increased investment in urban sanitationin the capital, Dakar.

Dgost yss

Country context reers to a countrys socioeconomic, poli-tical, cultural, and historical characteristics, including itsdevelopment trajectory and the current development aidarchitecture. Examining country context also involveslooking at political processes within the sanitation sector,their potential links to national political institutions andstakeholders, the assumptions that underpin sanitation sectorinvestment, and how and why sanitation investment wasdeveloped, and by whom. Te research tests the infuenceo cultural and historical actors on sanitation attitudes andbehavior, outlines the multiaceted risks and opportunities

that decentralization provides or sanitation investments,and examines the extent to which political opportunismdetermines sector decision making.

Beyond sanitations country context, a political economy

analysis ocuses attention on the sector arena - the ormaland inormal institutional arrangements that govern relationsand behaviors o stakeholders, as well as those stakeholdersinterests in the choice, management, and implementation

o sanitation service provision and investments. Te studyshowed that perceived political rewards, organizational resis-tance rom the center o government, and/or implementerslack o capacity to manage increased budget allocations sig-nicantly infuenced whether and how policy priorities aretranslated into budget allocations and disbursements. Politi-cally motivated decision making was ound to be driven by apreerence or highly visible, big inrastructure investments.In some but not all instances this is linked to opportunitiesor infuential individuals or groups to use these investmentsto generate income by privileged access or politically createdmonopolies (rent seeking).1 While all case studies came across

evidence o corrupt practices and rent-seeking behavior, itwas overall not identied as the predominant eature distor-ting sanitation investment decisions. Tere is evidence thatcivil society and the private sector not only can contributeto strengthening accountability but also can be reliable andtrusted partners or delivering sanitation services and creatingcommunity demand or sanitation provision.

Te sector processin this context reers to the dynamic and on-going process o negotiation, bargaining, and identicationo political economy risks and opportunities by governmentand development agency stakeholders. Te study explores thepotential or community participation, incentives or collecti-ve outcomes (an end to or example open deecation), and thetrade-os that strong political backing can have in terms oa sustainable engagement with a range o local stakeholders,including civil society and private sector organizations. Tesector process discussion looks in detail at the role o evidencein decision making and considers when and how research wassuccessully used to inorm investment decisions. Finally, thisstudy conrms the potential o individual sector championsto secure higher priority or sanitation investments.

Te research looked particularly or evidence o the impacton distributional outcomes in pro-poor sanitation investmentrom the interplay o political and economic actors. Somecase studies ound that political incentives (or example, ca-reer advancement or electoral support) played a positive role

1 Rent seeking generally implies the extraction of uncompensated value from others without making any contribution to productivity.



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in the extension o coverage to the poor. Moreover, all thecase studies made the case that decentralized governance osanitation investment can create stronger incentives or, andaccountability in, pro-poor investment. Subsidies or sanita-

tion investment have proven successul when combined withinormation campaigns and community mobilization.

Overall, the study conrms the importance o assessing stake-holder interests, identiying potential winners and losers,identiying incentives, and examining ormal and inormalinstitutions (such as norms and behavior). When such ananalysis is done well, by development practitioners in part-ner countries or development organizations, it provides theempirical evidence or both the support o and oppositionto development, and the rationales behind them.

Opto mptosTe report presents a number o signicant operational les-sons designed to inorm uture World Bank/WSP interven-tions that support sanitation investment. Several interlinkedelements have contributed to the success o the sector processin the case study countries. Combining understanding o thepolitical economy risks and opportunities in the sanitationsector with evidence marshaled on the economic, social, andpolitical impacts o investment choices can promote greateraccountability, partnership, and communication.

ecasestudieshaveshownthatunderstandingthe

political economy o sanitation investment providesthe basis or adequate timing, tailoring, and locationof investment and operations. Tis process includesrecognizing windows o opportunity or ormal andinormal engagement, identiying sector champions,and strategically sequencing development partnersupport levels to create incentives or long-term in-vestments and institutional reorm.

Donorsandinternationalinstitutionshavesuccessfullyused their comparative advantage in providing timelyand rigorous analysis to inorm pro-poor sanitation

investments. Examples rom the case studies showhow donors and lenders can successully acilitate an

exchange o experience among countries and supportlocal policy makers with studies that nd resonancewith national debates.

Strengthening accountability in the delivery and

accessibility o sanitation services is a vital element inthe successul management o the political economyo sanitation investments. It includes horizontal ac-countability mechanisms in which branches o thestate engage in mutual oversight (or example, throughperormance contracts or regulations) combined withvertical accountability relationships between citizensand policy makers whereby more systematic supportto civil society and grassroots organizations can suc-cessully create a demand or sanitation services.

estudyhasconrmedthatpoliticaleconomyanaly-sis in the sanitation sector can support a partnership

strategythat is based on sustained, fexible engage-ment with strategic external support o acknowledgedgovernment leadership.

Wider participation and clear communication okey issues are two important tools to address the powero vested interests who neglect the needs o the poorin sanitation investment and services provision. Tereis some experience o using related sectors (water su-pply, waste treatment) as an entry point or discussingsanitation provision with communities, particularlythe poor.

couso

Te report presents a brie assessment o lessons learnedrom the retrospective political economy analysis o the casestudies. It highlights how a better understanding o the risksand opportunities associated with institutions and stakehol-der interests in the sanitation sector can be used to bettersupport more pro-poor sanitation investment. In a sectorwhose deault mode can be very technical, donor and lenderinvolvement can acilitate practical operational guidance orpolitical economy analysis o more pro-poor service delivery.Using the Action Framework, the ollowing tabletable 5.1

rom the reports conclusionsummarizes value insights thatpolitical economy analysis can add.



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Optimize timing,

tailoring, and

location o

investment and

operations

Understand the

sector through

rigorous analysis

Realign

accountability

Partner

strategically

Support public

debate and

communication

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Ensurethatsupporttosanitationinvestment is aligned with existing

policy and planning cycles.

Recognizewindowsofopportunityor reorm.

Useavailableevidenceand/orcommission research to inorm

program design.

Supportstrengthenedtechnicalsystems and inormation ows.

Supportdecentralizationand

clarifcation o technical roles andresponsibilities.

Ensureeffectiveengagementwithkey central and sector ministries.

Supportinformationcampaignsrom one to many (policy makers to

public).

Managethepoliticaleconomyrisksandopportunitiestoincreaseimpact on pro-poor sanitation investment.

Ensurecarefulandstrategicsequencingofoperationstoincreasetheoverall impact o investments in later phases.

Lobbythroughpoliticaleconomyinsightsforsanitationinvestmentsthat are eective in dierent locations.

Recognizeandsupportgovernmentcommitmentandlocalleadership to help partners succeed and scale up their impact.

Identifyopportunitiestosupportinvestmentthroughpoliticalincentivizing.

Donorsandlendersarewellplacedtoidentifyappropriateevidenceor dierent stakeholders and tend to have a comparative advantage

in providing rigorous analysis to inorm reorm and sector choices.

Thetimingofinformationowisimportant.Evenwhenrigorousanalysis is undertaken dissemination o key fndings can get lost,

sidetracked, potentially misused, or captured i the timing is wrong

(or example, at the start o a new political administration).

Useanalysisofcomparativeadvantageinglobalpracticetosupportlocal policy makers and administrations to learn lessons rom

elsewhere and refne their operational ramework.

Supportstrengthenedhorizontalaccountabilitythroughcarefuldesign o contracts and specifcation o roles and responsibilities.

Supportinitiativestobuilddemandandstrengthenverticalaccountability.

Beexible:Adaptandsupportmodelsofverticalaccountability

andapplytothecountrycontext.Thesectorprocessmaynotbecharacterized by the kinds o vertical accountability relations central

tomuchdonorandlenderthinking.Thismeansthatsupportforaccountability must be tailored to the country context.

Realignaccountabilitybycombininghorizontalaccountabilitywithvertical accountability to allow, or instance, top-down changes to

be complemented by a more systematic attempt to engage with

grassroots, collective association and mobilization or institutional

change.

Ensurethatthepartnershipstrategyisbasedonsustained,exibleengagement with strategic external support.

Gettheprocessofpoliticaleconomyanalysisright:Ensure,whereappropriate, that analysis is conducted with a broad group o

stakeholders to ensure greater inclusion, and link this process tostrengthened public debate and communication.

Supportwidetwo-waycommunicationtodemocratizedebate,prevent capture, and secure and sustain public support or

institutional change.

Source: Authors analysis.

AddEd vAluE rom PoliTicAl Economy AnAlySiS in SuPPorT o Pro-Poor SAniTATion invESTmEnT



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Te Human Development Report 2006(UNDP 2006) statesthat 2.6 billion peopleabout hal o the worlds popula-tionlack access to basic sanitation. Te majority live inlow- and middle-income countries: three out o ve peoplein low-income countries, one in three in middle-incomecountries, and one in six in upper-middle-income countries

have no access to basic sanitation. Without a rapid increasein the scale and eectiveness o sanitation programs, theMillennium Development Goal (MDG) target or 2015 willbe missed by a wide margin.1 Tis will have severe impacts onpublic health, social indicators, well-being, human dignity,and economic development worldwide.

While 2.6 billion people do not have access to a pit latrine ortoilet in their homes, many more lack access to the kinds osanitation provision that minimizes the risk o excreta-relateddiseases. Tis dierence between improved and adequate

sanitation shows the diculties in knowing where and howto dene and measure who is adequately served by sanitationservices.2 Needless to say, dierent standards or sanitationare associated with dierent levels o health risk. Moreover,moving up the so-called sanitation ladderstarting romvery basic pit latrines to improved pit latrines, pour-fush a-cilities using water and septic tanks, through to conventionalsewershas nancial implications. According to theHumanDevelopment Report 2006, it costs 20 times more to connecta household to a modern sewerage system than to purchasea basic pit latrine. Also, any orm o improved sanitation has

to compete with cheap practices like deecating in the openor in a plastic bag.

All good sanitation has the same basic attributes, but di-erent contexts infuence which orm o sanitation worksbest where. Te best sanitation model is infuenced bypopulation concentration (individual arms in remoterural areas versus mega-cities), population density, sitecharacteristics (or example, the level o the water table),

the resources available to an individual, and the capacityo government provision. Where sewerage systems in ruralareas are oten not available, simple pit latrines and septictank latrines are plausible options. In high-density urbanareas, sewerage systems have obvious advantages. However,where the reach o the sewerage network is limited and alarge part o the population is not served, costs associatedwith connecting all households can be substantial, althoughthis may be oset by the adverse impact on health i less thanthe entire community is covered. Oten, sewerage systemsare sold (at a high cost) as a solution to all the problemsassociated with the temporary storage o human waste andits collection, transport, treatment, and disposal. However,they work well only i everyone is connected, and in manycases it is the poor who have no access.

Tere is ongoing concern that governments, at many levels,are not devoting enough attention and resources to sanita-tion services, particularly when compared to spending onwater supply and other inrastructure services. While thereare no general gures showing on- and o-budget expenditu-

res in the sanitation sector at regional levels, evidence at thecountry level illustrates that investments and expenditures

1 Millennium Development Goal 7, Target 7c, calls on countries to Halve, by 2015, the proportion of people without sustainable access to safe drinking-water and basicsanitation.

2 For definitions and categories please see the WHO / UNICEF Joint Monitoring Programme (JMP) for Water Supply and Sanitation, http://www.wssinfo.org/definitions/infrastructure.html.

Background andstudy objectivesI.


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are very low compared to those or water supply and otherinrastructure services. Additionally, existing sanitationinvestments and service provision are not always pro-poor.Eorts to increase access to sanitation inrastructure provi-

sion can benet better-o urban residents at the expense othe urban poor, slum dwellers or the rural population. Manydocuments suggest that governments limited sanitationexpenditures are determined largely by political, rather thantechnical or economic constraints in the context o compe-ting demands or resources (Kolsky et al., 2005; World Bank2006; Satterthwaite and McGranahan 2006).

It is against this background that the Sanitation Global Prac-tice eam o the Water and Sanitation Program (WSP) andthe World Bank commissioned a global study on the political

economy o sanitation with case studies rom Brazil, India,Indonesia, and Senegal. Te purpose o the study is to helpWSP and the World Bankthrough a better understandingo the political economy o sanitationin their eorts tosupport partner countries and development practitioners inthe design, implementation, and eectiveness o operationsthat aim to provide pro-poor sanitation investments andservices to improve health and hygiene outcomes.

Te study uses the strict denition osanitation as the saemanagement o excreta only. Tis excludes considerationo drainage and solid waste management, which oten havea higher political prole and expressed demand. We ack-nowledge that the chosen denition has implications or astudy o this sort. Tere are potential benets to adopting abroader denition, or example, around mobilizing supportor investment. Tere are also drawbacks o expanding thedenition, particularly i support mobilized or wider ele-ments, such as solid waste management, diverts resourcesaway rom excreta.

Considering these tradeos, a political economy rameworkis well suited to address the studys key questions:

Why are sanitation investments and service provisionnot given adequate priority in both lending andnonlending work?

When sanitation investments insucheorts are

undertaken, why are they not strategically targetedtoward increasing access to sanitation or the poor?

Te primary audience or this study includes World Bankoperational task teams engaged in projects, programs,and nonlending activities involving sanitation, as well asCountry Management Units. Te study aims to enhanceoperational design and implementation or improvedoutcomes in the provision o pro-poor sanitation servicesby providing World Bank ask eam Leaders and othersanitation practitioners with tools to understand and more

eectively manage the political economy o sanitation. Teaudience or this work will have diverse backgrounds andwill include social scientists and sanitation engineers. Tereport thereore attempts to use language and terminologyunderstood by all readers. When political economy andsanitation-specic terminology is used, we provide expla-nations where necessary.

Te term political economyitsel is subject to multipleunderstandings and denitions. In its original use in aca-demic literature, political economy reerred simply to the

application o economic principles to the practice o publicpolicy o nation-states. We ollow the current commonunderstanding o political economy as reerring to interdis-ciplinary studies that draw upon social and political theory,in addition to economic principles, in order to understandhow political actors, institutions, and economic processesinfuence each other.3

Te political economy o sanitation, thereore, reers to thesocial, political, and economic processes and actors thatdetermine the extent and nature o sanitation investment

and service provision. Understanding and managing thepolitical economy o sanitation consists o identiying and

3 For an overview of political economy, see, for example, World Bank/OPM 2008.

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addressing stakeholder interests and institutional deter-minants o sanitation investment process and outcomes,including an assessment o the risks and opportunities orbetter management o political economy toward pro-poor

investment.4

Tis Synthesis Report goes beyond a consolidation o theour country case studies to provide common lessons andconcrete operational recommendations and guidance thatsanitation practitioners can apply to their work. It seeks tosupport and enhance policy dialogue as well as the design,implementation, and perormance o evidence-based andpro-poor sanitation operations.

Te Synthesis Report is structured as ollows: Section 2 pre-

sents the studys conceptual ramework, which is based onearlier work on the political economy o policy reorm (WorldBank/OPM 2008) and was tailored to this study. Section 2also briefy summarizes the studys methodology.

4 While the studys terms of reference define sanitation as infrastructure and service provision required for the safe management of human excreta, for example, latrines, sewers,and wastewater treatment, some of the case study country contexts or programs utilize different definitions that do not necessarily count as safe management of human excretaand are not considered as improved sanitation by the UNICEF/WHO Joint Monitoring Program.

Section 3 uses the Diagnostic Framework to synthesize thecase studies ndings with reerence to a set o study hypo-theses and specically looks at evidence on the distributionalimpact o sanitation investments.

Applying the Action Framework, section 4 outlines a numbero signicant operational lessons rom the country case stu-dies that can help inorm uture World Bank interventionsthat support sanitation investment.

Section 5 briefy concludes by pointing out the value thata better understanding o the risks and opportunities as-sociated with institutions and stakeholder interests in thesanitation sector can add to support sanitation investmentand service delivery.

Annex A provides a detailed overview o the studys me-thodology, and annex B presents summaries or the our casestudies in Brazil, India, Indonesia, and Senegal.

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2.1 coptu mwok

he conceptual ramework or the research, illustratedin gure 2.1, describes how political economy infuencessector investments. Te ramework was initially developedby the World Bank Social Development Department andwas tailored to the sanitation context within this study. It is

one o several similar rameworks used by development andresearch organizations or political economy analysis.

1. Country contextreers to a countrys socioeconomic,political, cultural, and historical characteristics,including its development trajectory and the currentdevelopment aid architecture. It also looks at politicalprocesses within the sanitation sector, the potentiallinks to national political institutions and stakeholders,

the assumptions that underpin sanitation sectorinvestment, and how and why sanitation investmentwas developed, and by whom.2. Sector arena comprises theinstitutions that govern relationsand behavior within the sanitationsector and the stakeholders, with theireconomic and political interests thatboth infuence and are aected by thechanges in sanitation service provisionand investment.

3. Sector process reers to changethrough inormation lows, publicdebate, coalition building, participation,transparency, communication, and theinteraction o actors in the sanitationsector arena over time.

Te Action Framework(right handside o gure 2.1) illustrates operationalimplications and oers measures thatdevelopment practitioners such as

World Bank ask eam Leaders andtheir government counterparts can useto design and implement pro-poor

sanitation services and investments. It demonstrates howan analysis o the political economy o sanitation can betranslated into project design and action to better meet

Te Diagnostic Framework(let hand side o gure 2.1)ocuses on analysis and understanding the country context,sector arena, and sector process.

Conceptualramework andmethodology

II.

COUNTRY CONTEXT

Country's socioeconomic, historical and

cultural characteristics

Political processes within the sanitation sector

SECTOR ARENA

Stakeholders &

institutions:

Economic interests

(rents, asset, capture,

etc)

Political interest

(authority, clientelism,etc.)

SECTOR PROCESS

Dialogue & decision

making

Coalition building

Participation

Public debate &

information

Diagnostic Framework Action Framework

Timing, tailoring and location

of investment and operations

Understanding the sectorthrough rigorous analysis

Realigning accountability

Public debate and

communication

Partnership strategy

Source: Authors, based on World Bank/OPM 2008.

FIGURE 2.1 CONCEPTUAL FRAMEWORK FOR THE POLITICAL

ECONOMY OF SANITATION


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the sanitation needs o the poor. Eective management othe political economy o sanitation, in the terms o thisstudy, integrates a better understanding o the politicaleconomy and o policy impacts with actions that promote

greater accountability, partnership and communication. Te Action Framework thereore emphasizes rst the timing,tailoring, and locating o support to sector investment inorder to address political economy risks and opportunities. Alongside the operational objective o identiying thepolitical economy risks to sector progress is the need toidentiy the social and economic risks o sector policy andinvestment in terms o distributional equity. Rigorous andtransparent analysis o the poverty and social impacts opolicy impact is thereore an important element o thisAction Framework.5

Ongoing analysis can continue to generate eedback orrefection and course corrections through monitoring andevaluation (M&E) and dissemination.

he Action Framework also stresses the importance orealigning accountability in sanitation investment toempower citizens to hold policy implementers (governmentor private service providers) accountable. On the supply sideo this accountability equation, legislation and regulationcan reduce undesirable political economic infuence. On the

demand side, mobilizing and empowering poor consumersand communities can increase access and strengthen theequity outcomes o sanitation investment. Te sustainability,eectiveness, and impact o sector investment are in largepart a unction o developing institutions and building thecapacities o the actors involved. Tese institutions and actorscan include government agencies, contractors and serviceregulators, implementing/delivery agencies, and producerand consumer institutions.

5 The Poverty and Social Impact Analysis (PSIA) approach was jointly developedwithin the Bank by the Social Development Department and the PREM PovertyReduction Department, with collaboration from a range of bilateral developmentpartners, such as the UKs Department for International Development (DFID)and the German Development Cooperation (see World Bank 2003). The politicaleconomy framework used in this study is based on what might be termed thesocial perspective of PSIA and was developed by the Banks Social DevelopmentDepartment with Oxford Policy Management (OPM). See The Political Economy ofPolicy Reform: Issues and Implications for Policy Dialogue and Development Operations(World Bank/OPM 2008).

B 2.1 Sample queStionS for political economy analySiS of Sanitation inveStmentS: DiagnoSticframework

c x

Historicallegacies:Whatisthepasthistoryofthesector,including previous reorm initiatives? How does this inuencecurrent stakeholder perception?

Culturalandreligiouscontext:Towhatextentdoreligiousorcultural values shape public debate around sanitation anddemand or services?

Ideologies:Whatarethedominantideologiesthatshapeviewsand debates around the sanitation sector?

Policycontext:Whatisthepolicycontextforsanitation?Istherea(pro-poor)visionforsanitation?Whatisitsrelationshipto the water sector?

S ss d sdsDecisionmakingand budgetallocations:Howaredecisionsaround budget allocations made within the sanitation sector?

Nationalsubnationalrelationships:Whatistheinstitutionalrelationship between national and subnational governments?

Aresubnationalgovernmentsaccountabletothenationallevelor local electorate?

Powerrelations:Towhatextentispoweroverinvestmentdecisionsvestedinthehandsofspecicindividuals/groups?Whichinterestgroupsandpopulationgroupsdopoliticiansrepresent when deciding over sanitation investments? Howdo dierent interest groups outside government (or example,privatesector,NGOs,consumergroups, themedia) seektoinuence policy?

Corruptionandrentseeking:Istheresignicantcorruptionandrentseekinginthesector?Whereisthismostprevalent(forexample, at point o delivery; procurement; allocation o jobs)?

Whobenetsmostfromthis?Whataretheconsequences(or example, preerence o investment in big inrastructureprojects)?

Financing:Whatisthebalancebetweenpublicandprivateinvestment?Howisthesectornanced(forexample,public/privatepartnerships,userfees,taxes,donor/lendersupport)?Whatarethediscussionsaroundcostrecovery?

Demandforservices:Towhatextentisthereademandforsanitationservicesfromthecommunities?Whatarethefactorsshaping community demand or improved sanitation?

S ssSectorchampions:Whatroledochampionsplayinraisingthe profle o sanitation and supporting increased sector in-vestment?

Civilsociety:Whatrolesdomedia,NGOs,andcommunity-basedorganizations(CBOs)playinthesector?

Developmentpartner inuence:Howdodonorsandlendersattempt to inuence decision making and reorm implementa-tion in the sanitation sector?

Te Pta E Satat cepta ae a et

Source: Authors, based on World Bank 2007, OPM 2009a, and DFID 2009.See also annex A, table A.2.


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Te Action Framework stresses the need or a partnershipstrategy to address and overcome blockages to pro-poorsanitation investment. Tis broad-based partnership strategycan be linked to an inclusive and widespread public debate

and communications strategy that ensures transparency andhelps reduce suspicion, resistance, or ideological capture.In this way, evidence transparently produced and widelydebated becomes an opportunity or a sector dialogue witha two-way communication that shapes service provision andinvestment and moves communication away rom a publicrelations exercise.

2.2 Mtodoogy

Tis Synthesis Report consolidates the ndings rom asecondary literature desk review (OPM 2009b) and theresults o eldwork in Brazil, India, Indonesia, and Senegal.Te eldwork employed a mixed-method approach, primarilyusing qualitative analysis o stakeholders, institutions, andprocesses, complemented by quantitative data and analysiso budget allocation and coverage. Data collection wasnecessarily limited by the time and resources available orthe eldwork phase. A uller discussion o the methodologyis ound in annex A.

Using and rening the conceptual ramework that was

developed through earlier work (World Bank/OPM 2008),

the review included analysis o (1) key political economyliterature in the sanitation sector in general; (2) the mainissues o the political economy o sanitation in Brazil, India,Indonesia, and Senegal; and (3) an overview o the politicaleconomy issues regarding WSP and World Bank projects inthe case study countries. Te results rom the review were usedto identiy research hypotheses and questions. A universalset o research hypotheses and questions was developedduring the inception phase o the study or each part o theDiagnostic Framework. Tese are listed in annex A. Tese

hypotheses and questions were then tailored to each country casestudy context. A sample o political economy questions linked tothe Diagnostic Framework is provided in box 2.1.

Te eldwork data collection was driven by two qualitativeresearch methods: semistructured key informant interviewsand focus group discussions. Interviews were conducted with key inormants rom national and subnationalgovernment, private and public service providers, civilsociety, international donors and lenders, and project teams.Focus group discussions were conducted with representativesrom private sector and civil society stakeholder groups.wo analytical instrumentsstakeholder analysis andorganizational mappingwere used to examine the interplaybetween political actors and economic actors by assessingstakeholder infuence and interests, ormal and inormalinstitutions, and respective dynamics and processes.

Te countries or case studies were chosen purposively bythe World Bank/WSP team. Te countries selected representa range o sanitation contexts identied to generate useuloperational lessons learned through the application opolitical economy analysis6. Within the selected countries,there was an element o initial stratication involved in thepurposive sampling methodology. In the case o Brazil, or

example, discussions o project contexts identied a typologyo urban sanitation contexts and then purposively selectedsites based on their learning potential. Annex B providesdetailed summaries or all the case studies. Brie overviewsare provided in box 2.2.

A time lag was deliberately built into the eldwork scheduleor the global study, with eldwork conducted in India aheado subsequent eldwork in Brazil, Indonesia, and Senegal.Methodological lessons learned rom India subsequentlyinormed research in the other three case studies.

6 Case studies were selected based on the following criteria: the existence of WSP and Bank sanitation operations, in order to assess how they have managed political economy issues;interest by task teams; the presence of political economy issues commonly faced by the sanitation sector, in order to draw transferable lessons for other countries and regions;the opportunity to examine basic access versus improved sanitation via urban/rural infrastructure investments; available information on both demand and supply side aspects ofgovernance; different degrees of decentralization; community and private sector engagement, in order to learn from nonpublic sector schemes; and an urban/rural and regionalmix of cases.

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In this section the case study diagnostic ndings are synthesi-zed and summarized with reerence to the study hypotheses.Te analysis is organized around the Diagnostic Frameworkpresented in gure 2.1. Te discussion includes generalanalytical ndings and notes and explains dierences bet-ween country case studies. Detailed summaries o the case

studies are presented in annex B.

3.1 couty otxt

A countrys socioeconomic, political, cultural, and historicalcharacteristics, including its development trajectory and thecurrent development aid architecture, make up the countrycontext. An analysis o this context also involves looking atpolitical processes within the sanitation sector, the potentiallinks to national political institutions and stakeholders, theassumptions that underpin sanitation sector investment,and how and why sanitation investment was developed and

by whom.

cutu d sto otxt

Te research conrmed that the cultural and historical contextis a signicant determinant o sanitation investment. In eachcountry, contemporary attitudes and behavior toward sanita-tion investment could be explained at least in part by histori-cal actors. Where an appropriate combination o historicalcultural norms and devolved political authority prevailed,these could be cultivated by progressive decision makers togenerate demand or sanitation among citizens. In contrast,

where hierarchical political and social norms prevailed, theycreated a block to progress in sanitation investment.

In India, or example, successul investment in sanitation inMaharashtra could be attributed to a long history o socialmovements led by local leaders supporting the liberation

o oppressed castes. Senegals cultural and religious contextplaces a high importance on privacy. Combined with a rapidgrowth in urbanization, it created a demand or increasedwater and sanitation provision in urban areas, particularly inthe capital city, Dakar. Tis combination was reinorced 2000by the new political leadership under President Wade with

slogans such as Sanitation is a matter o dignity. In sociallyand economically dynamic Brazil, persistence o sanitationproblems, although decreasing over time, remains a sourceo embarrassment, as sanitation (especially sanitary sewerage)is associated with modern society. From a political point oview, since President Lula was elected, access to sanitationhas been linked to human dignity and a citizens right, similarto the case in Senegal.

In contrast, sanitation investment in Indonesia has beenconstrained by a historical context o authoritarian rule, in

which advocacy is dicult, and, crucially, a sociopoliticalview both within and outside o government that sanitationis a private responsibility. For cultural reasons, sanitation, interms o wastewater treatment and disposal, is also generallynot a subject that is discussed either widely or easily withinIndonesian society. Te central government had not sought tochange the perception that sanitation was solely a householdmatter. Awareness o and concern about what happens towaste is low across all socioeconomic groups within Indone-sian society. Public sanitation investment in urban areas oIndonesia has been low over many decades, and the majority

o the existing investment has been by private householders,who generally expect little rom government. Tese actorshave all had a signicant, long-term eect on limiting publicpolicy debates and maintaining a low demand or acilitiesand services that eectively and saely treat and dispose owastewater among all sections o the population.

Diagnostic ndingsrom the eldIII.


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Pot oppotusm d vstmt pomoto

Tere is evidence rom across the cases studies that sanita-tion investment promotion can be motivated by politicalopportunism. Tis represents an encouraging shit, as it

refects a higher political visibility or sanitation investmentin some contexts. With the exception o Indonesia, there isincreasing cross-party awareness oand consensus overthe importance o sanitation investment.

In Brazil, political parties that obtain support rom poorervoters certainly have a dierent attitude to sanitation, butthis is not necessarily associated with advocacy o dierenttechnologies or investment decisions. Te main politicaldispute in the Brazilian sanitation sector, not necessarilydened in terms o the traditional right or let, concerns

the respective roles o local municipalities and the water andsanitation companies controlled by the state governments.Te municipalistas emphasize the benets o responsivenessand accountability associated with municipal control. Teestadualistasemphasize the management and investmentcapacity and economies o scale provided by state utilities.Increased sanitation investment has beneted rom a grow-ing cross-party consensus since President Lulas decision toinclude it as a priority sector in the 2007 Growth AccelerationProgram (Programa de Acelerao do Crescimento, PAC).While Lulas Workers Party (P) is most clearly associated

in the minds o poorer voters with an emphasis on sanita-tion as an issue o dignity and citizenship, all parties benetrom the opportunities to make political capital out o largesewerage contracts.

In Maharashtra, the behavioral change among national andlocal political leaders toward promoting and supportingsanitation investment indicates a consensus across parties.It has been stimulated in part by an understanding o thegrowing political importance among rural voters o sanita-tion investment. As a consequence, there is little evidence opartisan politics in sanitation investment debates.

While there is no evidence that political considerations drivepro-poor sanitation investments in Senegal, highly visible

investments, with a corresponding emphasis on cultural orreligious importance, are made in Dakar and other areas,and this emphasis undoubtedly appeals to a large numbero voters.

Gob poy dbt d xt d gs

Te research looked at the acilitating role o external aidagencies and global policy debates or more pro-poor sanita-tion policies and investments. Global debates have impactedpositively on national sanitation strategies and investmentsin contexts where they strike a chord with the progress ointernal debates. Where sanitation debates are externallyinitiated or seen to be ideologically imposed, claims thatexternal agencies have an impact are less convincing.

It is important to note that in three o the our cases (India,Brazil, and Indonesia) the international nancial institu-tions (IFIs) are, unusually, small players with a acilitativeor supportive role. Te authors would argue that politicaleconomy analysis is even more important or IFIs and donorsin smaller countries where they have stronger infuence anda more critical role and thereore need to be more aware othese dimensions.

International attention to sanitation in Senegal via the 2004Global WASH Forum in Dakar kept water and sanitation

high on the countrys agenda. Tis provided a platorm ordonor support and a clear demonstration o national com-mitment by the government, with President Wade himselattending the conerence.

In Brazil, perceived enthusiasm by IFIs or privatization ostate water and sanitation utilities in the 1990s contributedto a backlash against neoliberal policies in the sector thatsucceeded in derailing the privatization process. IFIs suchas the World Bank had more success with their support orhome-grown innovations such as the condominial approach,8sponsoring conerences and other events that helped to spreadthese innovations and legitimize their uptake by utilities suchas EMBASA (the state company responsible or the successulBahia Azul investment program in Salvador).

8 Condominial systems refer to the process of implementing simplified sewerage service coupled with consultations and ongoing interactions between users and agencies duringplanning and implementation. The term is primarily used in Latin America, particularly in Brazil, and is derived from the term condominio(housing block).

Te Pta E Satat dast fs te fe


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In Indonesia, external agency infuence has clearly been im-portant. Government interest has been stimulated through,among other actors, a WSP comparative study on the eco-nomic impacts o sanitation, a WSP/US Agency or Inter-

national Development regional workshop in the Philippines,and the Indonesia Sanitation Sector Development Project(ISSDP) implemented by the Government o Indonesiatogether with the Water and Sanitation ProgramEast Asiaand the Pacic (WSP-EAP) (and counded by the Govern-ment o the Netherlands). However, in the case o ISSDP,donors infuence rests on their ability to understand andmanage eectively their relationship with government. Teconsultant team employed by WSP to work on ISSDP, orinstance, physically sits and interacts with government ona daily basis. While letting go o certain aspects o projectplanning, or accepting slower time rames, is not alwayscomortable or IFIs and donors, in a context where thegovernment does not want to be seen in any way as donordriven, a back seat role is key to encouraging governmentownership and commitment.

Te water and sanitation sector in India is heavily unded bygovernment and strongly government led. Te policy debateon the need or sanitation investment at the national levelhas been won and is government owned rather than beingexternally driven. Te perceived urgency o this need is linkedto external engagement with IFIs and donors on MDG

commitments. At the state level in Maharashtra, WSP helpedsupport pro-poor sanitation investment by introducing stateand local government colleagues to promotional approachesand low-cost sanitation technologies. WSP then used the evi-dent success o the Maharashtra program in advocacy at thenational level or a shit in emphasis in the otal SanitationCampaign rom household inputs (toilet construction) tocollective outcomes (an end to open deecation). In 2004,signicant changes were made to the otal Sanitation Cam-paign Guidelines to refect this policy shit.

3.2 Sto Beyond the sanitation country context, a political economyperspective ocuses attention on the sector arena, meaningthe ormal and inormal institutional arrangements orand

stakeholder interests inthe management and implemen-tation o sanitation investments and service provision. Teliterature suggests that this political economy challenge canbe particularly problematic in the sanitation sector, with

its need or cross-sectoral delivery and with a wide range odelivery strategies rom which to choose.9

isttuto gs d oppotuts

Te institutional complexity o the sanitation sector has longbeen recognized as a major obstacle to pro-poor sanitationinvestment. Despite this, the cases studies illustrate that op-portunities or institutional change have been recognized andsupported. Tese changes have demonstrated that institutio-nal complexity need not be a barrier to increased investmentand that ask eam Leaders and practitioners can work to

support progressive change within complex landscapes, withdecentralization oten providing more room or institutio-nal maneuver. Despite political sensitivity and institutionalconstraints, there is still a space where pragmatic work canbe done to support institutional change without huge loans.Tis work can support ormal rule changes, as with regulatoryreorm in Senegal, or inormal cultural change, as illustratedby institutional support in Maharashtra.

Te research conrms the constraints that arise rom a lacko a clear organizational home or sanitation investment.

Tis lack o a home can add to the complexity o sectorplanning and resource allocation processes while limitingorganizational accountability or progress. In Indonesia, orexample, there is no single national level ministry responsibleor sanitation policy; responsibilities are shared among atleast ve ministries. It is clear that urban sanitation has nodistinct organizational home, and so unsurprisingly thereare historically and currently varying degrees o interest insanitation. In Senegal, in contrast, there was a consensusamong key inormants that the National Sanitation Oce(ONAS) was increasingly taking responsibility or urban

sanitation policy and investment. One went as ar as to saythat ONAS is the real Ministry o Sanitation.10 Figure3.2, rom the Senegal report, maps institutional delivery osanitation investment.

9 For a review of available literature, see OPM 2009b.10 Under recent public administration reform, sanitation had been bundled together with other sectors into a single ministry (the Ministry of Urban Affairs, Housing, Water and

Sanitation).



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Te research ndings emphasize theimportant status odecentralizationas a key determinant o the patternand impact o sanitation investments.

With the exception o Senegal, wheresanitation is not decentralized,11 thecase studies highlighted several acetso centralization/decentralization.On the demand side, the strength odecentralized authority can empowerstakeholders to debate and contestsanitation investment with which theyare dissatised. Decentralized budge-tary authority can encourage pressurerom regional government, civil socie-

ty, and citizens to allocate budget tosanitation investment. On the supplyside decentralization can keep politi-cians and bureaucrats in touch withtheir grassroots constituents. In allcases, the positive infuence o decen-tralization on sanitation investment isconditional upon the level o aware-ness and strength o demand amongbudget holders and citizens. While

in some cases, as in Maharashtra andin Brazil, decentralization can proveto be hugely signicant in promo-ting institutional arrangements thatacilitate more eective cross-sectoral

11 In Senegal, local governments are tasked to develop local water and sanitation plans. However, a combination of capacity constraints at the local level and weak accountabilitybetween central and local government means that this hardly ever happens in practice. Remote rural areas are sometimes forced to take responsibility for their own sanitationservices, as their needs are more easily ignored by the central Government in Dakar.


Policy and strategy Operations

Sanitation Directorate Onsite

sanitation

(cell)

Sewerage/

network

(service)

Local

Government

plans on water

and sanitation

SDE

BILLING

Pilot-siteDakar(PADPUQ/GPOBA)

Urban

sanitation

Rural

sanitation

Reporting

In Dakar (and

other urban centres)

this does not exist

(more a reality in

remote rural

areas)

Ministry of Urban

Affairs, Housing,

Water and Sanitation

ONAS

National Sanitation Office

De facto ONAS plays a bigger

part in policy making than the

formal organisation suggests

Notes: AGETIP: Agence dExcution des Travaux dIntrt Public (public works and employment agency)SDE: Sngalaise des Eaux (Senegalese water utility)Source: Garbarino and Gune 2009.

FIGURE 3.1 INSTITUTIONAL LANDSCAPE OF URBAN SANITATION IN

SENEGAL (SPECIFIC FOCUS ON DAKAR)

NGOs,CBOs

Privatesector

Private households,beneciaries

AGETIP

CONT

RACT

CONTRACT

INFORMATION

C

REATING

DEMAND

CONTRACT

CONSTRUCTION


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decision making at the subnational level, in other cases, suchas in Indonesia, a lack o clarity over institutional authorityat the national level can be reproduced and magnied atsubnational level.

Decentralization is long established in Maharashtra, andsome senior political leaders and ocers have worked theirway up though the hierarchy, bringing with them an unders-tanding o, and commitment to, village-level action. Somemaintain close links with their village. Indeed so strong wasthe decentralized nature o sanitation investment innovationin Maharashtra that the national program borrowed romthe incentive program initiated at the local level ratherthan the other way around. Also in Maharashtra, a rangeo social sector departments and programs including pres-

chool centers, education, health, and sanitation all underthe district council (Zilla Parishad) chie executive ocer.Tis makes it easier to secure cross-sectoral bureaucraticsupport or development programs and to maintain goodcoordination between the bodies concerned.

In Brazil, the ederal governmentwhich sets nationalsector guidelines and serves as the principal source osanitation investment unds, whether through grants orloansunctions more as a dynamic arena or strugglesbetween dierent stakeholders than as a stakeholder in itsown right. For example, the military regime rom 1964 to1985 used the resources o an authoritarian and highly cen-tralized state to push through national strategies such as theNational Water Supply and Sanitation Plan(PLANASA).In contrast, todays democratic, pluralist, and highly de-centralized Brazil orces national policy making to respondto competing pressures rom promunicipal municipalistas,prostate utilityestadualistas, and proprivate sectorprivatis-tas. Tese advocates mobilize support across dierent levelso government and rom dierent parts o political society,

civil society, and the private sector and can orm tacticalalliances around points o ideological convergence. Figure3.3 illustrates these competing pressures.


Federal

Goverment

State-level public sector operation

Public sector

operation

Municipal public

sector operation

Local-level operation

Private-sector

operation

Commerial operation

on capitalist lines

estadualistas

privati

sta

s

municip

alistas

Source: Cunha et al. 2006, our translation (graphic provided by andreproduced by permission o Frederico urolla)

igurE 3.2 SAniTATion SEcTor STAkEholdErS

idEologicAl PoSiTionS, BrAzil

Te case study o the Bahia Azul investment program showedthat in the 1990s it was possible or a state government torapidly scale up sewerage provision with a go-it-alone ap-proach. But with this approach came missed opportunitiesor cross-sectoral work, including synergy with advocatesor the upgrading o health and neighborhood services bythe municipal administration authority. In todays sectorarena this approach would no longer be possible, given thestrengthened role o the municipalities and the need or im-the need or im-

proved ederal cooperation between states and municipalitiesunder the 2007 Basic Sanitation Law, which also covers watersupply. Sanitation investments under the fagship GrowthAcceleration Program (PAC) include a much greater ocuson collaboration between state and municipal governmentdepartments, though some cross-sector coordination issuesremain. Stakeholder power and interest mapping (gure 3.4)clearly shows how political economy actors made it impos-sible or one side to prevail in the struggle over the 2007law. Using inormation gathered through key inormantinterviews, a graphical presentation o stakeholder interests

and power relations places stakeholders on a matrix; eachstakeholders position is determined by its interest (x-axis)and its ability to infuence decision making (y-axis).


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StkodStkod Stkoditstsitsts itsts

Source: Shankland et al. 2010.

Presidentsofce

Secretaria Nacionalde Saneament

Ambiental(NationalSecretariat orEnvironmentalSanitation,SNSA),a department o theMinistryofCitiescontrolledbyPT(WorkersParty)until 2005

FundaoNacionalde Sade (National

Health Foundation,FUNASA),executive agencyoftheMinistryofHealth controlledbyBrazilianDemocraticMovementParty(PMDB)

1

2

3

4

5

6

7

8

9

10

11

Guaranteelegalandpolicy ramework toacilitate increasedinvestments insanitation, balancing

demands romdierent politicalgroups

Establish controlo legal andpolicy ramework;strengthen role omunicipalities

Avoidcentralizationo policy control

bySNSA;increase scopeor negotiating

sanitationinvestments in smallmunicipalities

igurE 3.3 STAkEholdErS, inTErESTS, And PowEr in nEgoTiATionS ovEr ProviSionS in ThE SAniTATion

lAw To STrEngThEn ThE rolE o municiPAliTiES

AssociaodasEmpresas deSaneamentoBsicoEstaduais(AssociationofState SanitationCompanies,AESEBE)

AssociaoNacionaldosServiosMunicipaisdeSaneamento (National

AssociationofMunicipalSanitationServices,ASSEMAE)

AssociaoBrasileiradeInfra-EstruturaeIndstriasdeBase(BrazilianInfrastructureandHeavyIndustry

Association,ABDIB)

AssociaoBrasileiradas ConcessinariasPrivadasdosServiosPblicosdeguaeEsgoto,(Brazilian

AssociationofPrivateWaterandSanitationOperators,ABCON)

Orient legal, policy,and resourceallocation rameworkto strengthen role ostate utilities

Orient legal, policyand resourceallocation rameworkto strengthen role omunicipalities

Increasedinvestmentin sanitation

Orient legal, policy,and resourceallocation rameworkto strengthenrole o private-sectorconcessions

Partido dosTrabalhadores(WorkersParty,PT),leadpartyingoverning coalition

PartidodoMovi-mentoDemocrticoBrasileiro(BrazilianDemocraticMovementParty,PMDB),largestpartyinPT-ledcoalition

Partido da SocialDemocraciaBrasileira(BrazilianSocialDemocracyParty,PSDB),leadpartyinopposition coalition

PartidodaFrenteLi-beral(LiberalFrontParty,PFLchangednametoDEMorDe-mocrats in 2007), parto opposition coalition

Orient legal, policy,and resourceallocation rame-workto strengthen roleo municipalities,

promote citizenoversight, andrestrict private-sectorparticipation

Guaranteeowofsanitation resourcesto supporters in bothstate governmentsand municipalities,includingviaFUNASA

Orient legal, policy,and resourceallocation rameworkto strengthen role ostate utilities, promotetechnical regulation,

and boost private-sector participation

Orient legal, policy,and resourceallocation rameworkto boost private-sector participation

High

Power

Low

A B

C DSupport Neutral Opposition

Interest

6

1

9

3

4

5

7

8

2

10

11


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lo govmt dptmts

Bappeda XMunicipalDepartmentofPublicWorks(PU) X X

MunicipalCleaningandLandscapingAgency(DKP) X X

Neighborhoodadministrativeunits(RT/RW) X X

EnvironmentalServicesAgency(DLH) X X X

EnvironmentWatchBody(BPLHD)atprovinciallevel X

WaterResourceBody(DinasSumberdayaAir)*** X

lo govmt tpss

PDPAL(sewerageutilities)* X X

PDAM(waterutilities)* X X

nogovmt stkods

Private enterprises X**NGOs/CBOs/communitygroups X X

Individuals/households X X

In Indonesia, rapid decentralization gave greater administra-tive independence to local governments and moved nan-cial resources and responsibility or the provision o manypublic services (including water and sanitation) directly to

the district level. However, the eects o the lack o clearresponsibilities at national level are compounded by a lacko clarity over the roles o dierent levels o local governmentand o dierent institutions within local governments.Fur-thermore, responsibilities o local agencies may vary betweendierent districts and cities as there is no national policy oninstitutional conguration or allocation o responsibilities orsanitation between local bodies at the local level. gure 3.5presents an institutional map o Indonesias urban sanitationsector and clearly highlights the lack o clarity over responsi-bility. Tis reduces accountability or sanitation service deli-very. It is unclear to ordinary members o the public whom

they could approach and/or complain to. Tis contrasts toelectricity suppliers, or instance, where advertised hotline

numbers enable clients to contact providers directly whenthere is a problem.

A urther key issue aced due to decentralization in Indonesiais the increasing practice o redistricting, through which localpoliticians can petition or districts to be split into smalleradministrative units through a mechanism calledpemekaran.In theory this should acilitate better service delivery, moreequitable resource distribution, and more representative go-vernment. While redistricting has increased revenues, localbudget generally give priority to ree education, (curative)health services, and the construction o new government o-ces to house newly ormed local administrations. Tese easilycrowd out sanitation and other public health promotion issues.Tis bottom-rung perception o sanitation is entrenched byan attitude among mst local governments that responsibilityor sanitation rests with others: NGOs, the private sector, or,

despite decentralization, the national government, and mostimportantly perhaps, with individual households.

Notes:* Depends on district / city arrangements (only two cities have PDPAL separated rom PDAMJakarta and Banjarmasin).** Pit emptying.*** Can take the role o managing septic tanks operators.**** As with sanitation, organizational responsibility or drainage is complex and depends largely on the grade o roads and associated drains. Te Ministry o Public Works is responsibleor drainage on rst- and second-level roads (interprovince and intercity roads). ertiary roads and local streets are oten under local government responsibility but neighborhood streets areoten neglected. Developers build drainage systems or new housing estates and ormal developments, but drainage in inormally growing settlements is oten unaddressed.Sources: WSP-EAP 2009; Brook et al. 2010.

istutu dvopmt d sv dvy

lo

poy d

sttgy Sewerageand

wastewater

treatment

Sludge

treatment

Communal

toilets

SANIMAS

(urban

community

sanitation

system)

Household

toiletsand

septictanks

Drainage****


igurE 3.4 inSTiTuTionAl mAP o ThE urBAn SAniTATion SEcTor, indonESiA


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Budgt otos d dsbusmts

Te research ocused on the political economy actors thatmight explain the gap between sanitation as an expressedpriority and actual changes in budget allocation and dis-

bursement. Te challenge o translating political statementsinto budget commitments was conrmed. In some cases thisis a unction o the pressure to allocate scarce resources tosectors with a traditionally higher perceived priority or withhigher perceived political rewards. In cases where resourcescarcity is less o an issue, the importance o organizationalresistance rom within the executive can become apparent.In these cases, executive ministries, departments, andagencies have insucient pressure rom above and rombelow to allocate budgets to (more progressive) sanitationinvestment. Tereore, even where there is high-level buy-in, and demand generated within civil society, this will not

necessarily change political preerences within institutionsimplementing government policy. Another explanation orthe unding gap is seen where implementing agencies lackthe technical and governance capacity to absorb and mana-ge increased budget allocations. Where governments havesuccessully bridged these policy-to-unding gaps, nationalor ederal level sanitation programs can provide a protectedinstitutional vehicle or sanitation investment.

In Indonesia there has oten been a huge gap between publicstatements and budget execution levels. Tis is less a unctiono resource scarcity and more a matter o organizational re-sistance or lack o real interest within government. Despitecertain ormal processes being in place, inormal patronclient relationships play a key role in determining investmentpriorities and unding rom central to local governments.Tis is particularly evident in the infuence o provincial levelgovernment stakeholders and actors over budget allocations,where personal relationships and political considerations arekey to obtaining unding.

In contrast, these political economy gaps have been largelybridged at the ederal level in India, with the governmentputting in place a transparent institutional mechanism odisbursement and authority that ensures the transer o

government investment into various elements o the natio-nal otal Sanitation Campaign. At the subnational level inMaharashtra, the ability o the Maharashtra governmentto secure strong and sustained bureaucratic support or itspolitical commitments was undamental to the progress osanitation investment in the state.

In Senegal, budget allocation has been hampered by capacityconstraints at the policy and planning level as well as by com-peting investment priorities with potentially greater politicalrewards, such as investments in Dakars road network. Anorganizational mapping, undertaken during the eldwork,identied key decision and political economy entry pointsduring the budget process, including the presidents abilityto infuence the budget process or the importance o lineministries capacity to present a sound budget proposal to theMinistry o Finance. gure 3.6 summarizes this analysis and isdivided into three parts: the ormal rules o the budget process(in the center), key points o decision making (in blue, onthe let), and a description o the inormal processes (circledin red, on the right). Moreover, cost recovery is subject tomuch debate in Senegals urban sanitation sector today. Withlittle actual contribution rom local government, ONAS gets

its main revenue rom the sanitation surcharge collectedwithin the water billing. In August 2008 ONAS signed aperormance contract with the government conrming thatthe state would cover the nancing gap i ONAS perormedsatisactorily.12 Te sanitation sector has thereore ollowedthe successul example o the water sector in designing con-tracts that shape stakeholders incentives in order to protectinvestments rom adverse political economy impacts.

12 ONASs performance was tracked in wastewater treatment, investment in the network (extension and rehabilitation), new connections and new onsite facilities, networkmaintenance, and financial management.



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In Brazil there is a signicant gap between the amounts

earmarked or sanitation investment in congressionalbudgets and those actually released by the national trea-sury, with political as well as nancial criteria governingthe ultimate decisions on disbursements. Most sectorinvestment has historically derived rom ederal govern-ment loans, with strict technical and nancial viabilitycriteria that limit uptake to the larger and better-run stateutilities. Te inclusion o sanitation in the Growth Ac-


celeration Program has, however, signicantly increased

the availability o grant nance or investment by smallerand more heavily indebted utilities in poorer states andmunicipalities. gure 3.7 graphically represents the mix oloans and grants with dierent institutional and politicalpathways to decision and disbursement. (Where relevant,sites or moments o political input to decision making arenoted in red alongside the ocial technical and nancialdecision pathways.)

FORMAL PROCESS

MoF publishes budget envelopes

INFORMAL PROCESSKEY POINTS OF DECISION-MAKING

AND PE ENTRY POINTS

Budget proposal & preparation in

Ministrys Sanitation Department

Submission of department budgets

Submission of ministry budgets to MoF

MoF validates proposal according to sector policy

and makes adjustments (usually cuts)

Ministre de lUrbanisme, de lHabitat, de

lHydraulique Urbaine et de lAssainissement

prepares budget proposal

Prime Minister & Council of Ministers

Parliamentary approval process

Department capacityto prepare sound budget

proposal according to sector policy

NEGOTIATIONat intra-Ministry-level

MoF influence

to reduce line ministries budget proposals

NEGOTIATION

at inter-Ministry-level

Budget envelopes are not

published by MoF and lineministries make proposal into the blue

President influences all stages

of the budget process

De-facto no changes at Parliament-level

Source: Garbarino and Gune (2009).

FIGURE 3.5 ORGANIZATIONAL MAPPING OF THE BUDGET PROCESS FOR URBAN SANITATION IN SENEGAL


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CAIXA = Caixa Econmica Federal (Federal Savings Bank); BNDES = Banco Nacional de DesenvolvimentoEconmico e Social (National Bank or Economic and Social Development); COFIEX = Comisso deFinanciamentos Externos (Brazils ederal government external nancing commission).Source: Shankland et al. 2010.

igurE 3.6 BudgET dEciSionS And rESourcE lowS or

SAniTATion invESTmEnT grAnTS And loAnS in BrAzil

Te key constraint to increasing boththe quantity and the quality o sanita-tion investment in Brazil is now percei-ved to be weak technical and nancial

capacity resulting rom the decades-long neglect o the sector. While theprivate sector is already beginning torespond to the new, more positive sce-nario, signicant investments continueto be needed in the technical and ma-nagement capacity o the public bodies(at ederal, state, and municipal levels)that commission, monitor, regulate,and in most cases operate sewerage andother sanitation services.

coupto d t skg

A particular dimension to the budgetallocation and disbursement debate isthe incidence o corrupt practices basedon rent-seeking behavior within organi-zations with control over budgets andauthority over sanitation investmentdecisions. While all case studies cameacross evidence o rent seeking andcorruption, it was not identied as the

predominant eature distorting pro-poor sanitation investments.

In Indonesia sanitation investmentswere said to be less popular with manycivil servants than other types o largerinrastructure projects (or example,roads and buildings), as they providedewer opportunities or corruption. Onesenior civil servant argued, I you gointo sanitation, you are signing up to

be poor. Tere are, however, corruptpractices in sanitation investment:private sector interviewees involved inbuilding sanitation inrastructure in thepast explained that they were usuallyasked or kickbacks o up to 20 percento the total budget. Corruption is a

PUBLIC SECTOR FINANCING FLOW

FROM FEDERAL TO STATE/MUNICIPAL LEVELS

1. GRANTS

Parliamentary Earmarks

PAC call for proposals

Mayor/Governor

Mayor/Governor

CAIXA CAIXA

Deputy/Senator

NationalBudget

Ministry ofFinance

Presidents

ofce

Give instructionsto release or retainthe money basedon politicalnegotiations

Release or retainsthe money basedon budget/cashow criteria

Mayor/

Governor

Ministry

of Cities

PACManagement

Committee

CAIXA

Decisions basedon economic /nancial criteria

Selectprojectsbased ontechnicalcriteria

Second selectionbased on regionaldistributiveconcerns

Decisions based onpolitical negotiations

PUBLIC SECTOR FINANCING FLOW

FROM FEDERAL OR IFI TO STATE/MUNICIPAL LEVELS

2. LOANS

PAC call for proposal (national or regional scope)

IFI lending

Mayor/GovernorStateCompany

CAIXA Treasury

Ministry of

Cities

PACManagement

Committee

BNDES

CAIXA

Select projectsbased ontechnical criteria

Second selectionbased on regionaldistributive concerns

Checks level of

indebtedness

CAIXAMayors/

GovernorsFed. Gov

Fed. Gov

programIFI

IFI

COFIEX

(Finance Ministry) Senate Treasury

Mayors/

Governors/StateCompanies Consulta-

tion letter


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widely and oten discussed topic within the national media,and there is a general public perception that someone alwaysgets rich with inrastructure investment.

Another opportunity or rent seeking is created in Indonesiathrough the ongoing decentralization process. Te practice osplitting districts into smaller administrative units should intheory acilitate better service delivery, more equitable resourcedistribution, and more representative government. However,as decentralization means more central unding is available,and more money is also raised locally through taxation, a keymotivation or splitting districts has oten been control overresources and rent-seeking opportunities or local elites.

Within the low technology investment arena in rural sa-

nitation in India, opportunities or corruption prevail inthe disbursement o a large central budget under the otalSanitation Campaign and or rent seeking in the approval onancial awards or clean village status. Tis study, with itsrelatively brie period o eldwork, did not elicit evidence ocorruption in the disbursement o SC budgets rom centralto subnational administration. Nor was there any evidence orent seeking by ocials responsible or conrming clean villagestatus in Maharashtra. While it is reasonably sae to assumethat corruption and rent seeking play their part in this sector,as they do in others, the eldwork team did not conclude that

this distorted the process and its outcomes signicantly.

In Senegal, the eldwork team did not come across concreteevidence or corrupt practices within the onsite investments. Works are closely monitored through the Global Partner-ship on Output-Based Aid (GPOBA) initiative. However,the overall preerence o politicians or big inrastructureinvestmentswhile on one hand explained by a technologicalbiasis likely to be infuenced by the opportunities createdor rent seeking.

In Brazil the political commitment to condominial investmenthas been pro-poor while generally maintaining the appeal ordierent stakeholders. For politicians, this creates relatively bigpublic works programs or investment, and key inormants inBahia raised the issue o the closeness o the state government toparticular construction companies. Moreover, according to keyinormants, there are expectations by construction companies

who nance politicians election campaigns that they will berepaid out o infated contracts when that particular politicianis successully elected. While not covered in the case study(as it is not unded by World Bank or WSP), FUNASA, the

Ministry o Health agency responsible or small-town sanita-tion, has been involved in numerous corruption scandals, andits ormer administrative director was arrested by the FederalPolice on suspicion o embezzling roughly US$30 million inspring 2010.

Toog o d po-poo stto povso

Te research explored whether and why decisions about pro-poor sanitation investment can also be derailed by technologi-cal preerences. Politically driven decision making was char-acterized by a preerence or highly visible, big inrastructure

investments, with in some instances rent-seeking opportunitiesbeing an important incentive or those in power. Amongengineers, there is a strong technical bias or traditional sani-tation investments, such as sewerage-based service provision,oten at the expense o appropriate technological choices. Tesector arena is thereore oten characterized by political andtechnological preerences that benet the minority o well-ourban residents rather than the poor majority.

In cases where technological and political preerences are notthe same, an interesting debate emerges between sector stake-

holders. In Senegal, many high-ranking politicians are sup-porters o investing in the expansion o the sewerage networkand costly treatment plants, whereas many technical sectorspecialists and bureaucrats ha

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