Water Global Practice Discussion Paper Water, Poverty, and the Economy Water, Well-Being, and the Prosperity of Future Generations Claire Chase and Richard Damania About the Water Global Practice Launched in 2014, the Word Bank Group's Water Global Practice brings together financing, knowledge, and implementation in one platform. By combining the Bank's global knowledge with country investments, this model generates more firepower for transformational solutions to help countries grow sustainably. Please visit us at www.worldbank.org/water or follow us on Twitter at @WorldBankWater. 3 Introducing Commercial Finance into the Water Sector in Developing Countries Water, Well-Being, and the Prosperity of Future Generations Claire Chase and Richard Damania © 2017 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington, DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. 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Contents Main Messages 1 Progress on the MDGs—and the SDGs Going Forward 3 Myriad Effects of Unclean Water, Bad Sanitation, and Poor Hygiene on Health and Development 5 Remedies—Changing People’s Habits and Price Incentives 9 A New Generation of Challenges 12 Sustaining Gains 14 Conclusion 16 Notes 16 References 16 Water, Well-Being, and the Prosperity of Future Generations iii Abstract W ater-related diseases are a major health burden for populations, especially the poor. Meeting global aspirations for poverty reduction will require addressing the global water and sanitation challenge. This discussion paper provides an overview of the poverty-related impacts of inadequate water sup- ply and sanitation services, and highlights the new policy challenges that have emerged in a more populated, polluted, and urbanized world with finite water resources. New approaches that assure sustained changes in individual behavior, more equitable access to services, and incentives for improved water resource stewardship are needed. Main Messages the challenges of the new Sustainable Development Goals Water-related diseases Poverty and poor health are close companions, with (SDGs). disproportionately affect the links that run in both directions. The poor remain poor and create a vicious spiral more vulnerable to a range of preventable diseases Hundreds of millions of the of poverty that often persist and health disorders, while poor health, in turn, lim- poor in less developed countries across generations. its employment opportunities and labor productivity, live without safe drinking water thereby accentuating poverty. Waterborne diseases and sanitation. Services typi- are heavily implicated in this vicious cycle of poverty cally fail to reach these populations. Those that do are and ill-health. By some estimates, every minute a seldom affordable or of adequate quality. These condi- child dies of a water-related disease (IMF 2015). tions create an environment where water-related dis- Meeting global development aspirations and the eases thrive, requiring greater spending on health care, World Bank’s “twin goals” of poverty reduction and limiting productivity, and sending the poor deeper into shared prosperity will require addressing the global poverty. water and sanitation challenge as a priority. Young children bear the brunt of this disease burden, This document provides a brief overview of the the effects of which may become more apparent only p overty-related impacts of inadequate water sup- ­ over a lifetime, with reduced school attendance, ply and sanitation services. It highlights the new impaired academic performance, reductions in earn- policy challenges that have emerged in a more pop- ing potential, and higher susceptibility to chronic dis- ulated, polluted, and urbanized world with expand- ease—a side effect of early childhood disease and ing water d ­ eficits. It briefly identifies the policy undernutrition. The economic costs of poor water and needs and priorities that must be addressed to meet sanitation are significant and estimated at $260 billion a year, or about 1.5 percent of the GDP of developing countries (Hutton 2013). This discussion paper was authored by Claire Chase, Economist, World Bank and Richard Damania, Lead Economist and Global Lead Water, New evidence suggests that these effects may in Poverty, and the Economy Global Solutions Group, World Bank. The authors thank Guy Hutton, Montserrat Meiro-Lorenzo, Patrick Osewe, fact be an underestimate. In the past the effects of and Ashi Kohli Kathuria for comments on earlier versions. poor water and sanitation were thought to occur Water, Well-Being, and the Prosperity of Future Generations 1 primarily through diarrhea and other infectious There are other issues that have less to do with engi- ­ diseases. More recent research indicates that a sub- neering and more to do with human behavior. stantial portion of the burden of undernutrition, Household behaviors—safe storage of drinking water, and stunting in particular, may be due to poor gut use of latrines, handwashing—largely mediate the conditions caused by poor water and sanitation effects of water and sanitation infrastructure, espe- environment that do not produce symptoms such as cially where infrastructure is of lower quality. diarrhea (Humphrey 2009). The solutions to this multifaceted problem are not There is mounting evidence of other adverse straightforward. The Sustainable Development Goals impacts of poor water and sanitation, such as higher (SDGs) aim to ensure availability and sustainable rates of infection during birth due to poor hygiene management of water and sanitation for all, including ­ practices. Lack of running water and improper con- ending  open defecation. Spending on infrastructure tainment and disposal of human waste greatly hin- alone—which is still far from adequate in many parts dered response efforts in some clinics during the of the world—will not be enough, while conventional 2014 outbreak of Ebola in West Africa. Industrializing methods for changing people’s behavior, such as countries now confront a dual disease burden: Community Led Total Sanitation and large-scale the  pollutants generated by rapid industrializa- handwashing campaigns, have demonstrated limited ­ tion  have introduced new success. disease risks, even before To change the behavior of countries have dealt with To change the behavior of millions and achieve the millions and achieve the existing diseases of underde- ambitious targets of the SDGs, innovation is needed. ambitious targets of the SDGs, velopment such as diarrhea New ways of marketing better behavior and influ- innovation is needed. and undernutrition. encing social norms are needed. Some initiatives appear to be promising. The use of unconventional Over the past several decades, media and communication techniques, subliminal the global community has invested billions of dollars nudges, and other devices that cater to behavioral to improve water and sanitation infrastructure. These biases have been shown to work and should be investments helped to achieve the Millennium scaled up. Innovation will also need to come in the Development Goal (MDG) target for safe drinking water form of new financial products and services that five years ahead of schedule. But similar levels of enable the poor to invest in water and sanitation, or investment did not occur for sanitation; as a result, this better targeting of subsidies to those who are most target was missed for 700 million people. in need. Even reaching these access targets would not signal Water insecurity—loosely defined as water stress “mission accomplished.” Drinking water supplied or scarcity—will compound the problems the poor from a source that meets the MDG target of an face in accessing water and sanitation. Water con- “improved source of water” does not guarantee that straints in developing countries are set to worsen the water is safe to consume, is nearby, or is available with ­ p opulation growth, urbanization, and climate when needed. By the same token, sanitation solutions change. Somewhat paradoxically, many of the that do not provide an option for transporting, treat- most water stressed countries in the world (in the ing, and disposing of waste risk introducing harmful Middle East and  North Africa and Central Asia) pathogens back into the environment. are  also the least efficient users of water. As the 2 Water, Well-Being, and the Prosperity of Future Generations SDGs move the goalpost to universal coverage of a pivotal to success—Individuals, higher standard, more water will be demanded and Institutions, and Integrated Beyond investments in regional shortages of water will become even more water resource management: infrastructure, greater severe. innovation and investment 1. Invest in Individuals to pro- in the 3-I’s—Individuals, Most often, water stresses are heightened by water mote and sustain behavior Institutions, and Integrated management policies and subsidies that promote change using new communi- water resource management— and condone overuse, wastage, and inefficiency. In cation tools, “nudges,” and will be pivotal to success. urban areas, subsidized or free piped water is typi- subsidies where needed. cally provided to the middle and upper classes, 2. Strengthen emphasis on Institutional capacity to while the unserved poor, particularly in urban assure sustainable access of good quality and slums, are compelled to pay a much higher price for affordable services through equitable cost-­ water of uncertain quality from vendors. “Free” recovery mechanisms and greater accountability water is therefore especially costly for the poor—in to the consumer. terms of both the higher price they pay per drop of  water as well as the health effects of contami- 3. Promote Integrated water resource management nated water. through incentives that address issues of water qual- ity, as well as the integrity of watersheds and the Water stresses are further compounded by declin- wider resource base. ing water quality in all developing countries, often to the point of irreversible damage. The pollution plumes of cities and intensive agriculture are grow- Progress on the MDGs—and the SDGs ing larger with expanding economies and rapid Going Forward industrialization. The health effects of chemicals Hundreds of millions of the poor in less developed coun- and metals such as arsenic, mercury, and pesticides tries lack access to safe drinking water and sanitation. are often less immediate but more damaging About 30 percent of humanity—an ­ estimated 2.4 billion than the effects of biological pathogens. Chemical people—lack access to sanitation facilities that meet ade- p ollutants are much harder and more expensive ­ quate standards of hygiene (map 1).1 About 600 million to  treat than sewage. As a result, it is often people rely on what development agencies call unim- cheaper  to control and mitigate these pollutants proved drinking water sources, susceptible to high lev- o f-pipe solutions. at  source rather than seek end-​ els of contamination (map 2) (WHO and UNICEF 2015). This is especially challenging in developing coun- Many more use sources that are classified as improved, tries, where the required policies, institutional but the water is still  unsafe for consumption. Recent capacities, and compliance regimes need to be estimates suggest that 1.8 billion developed. people (28 percent of the global Going forward, it is clear that a higher level of invest- population) use unsafe water, 2.4 billion people lack improved ment in the hardware of water and sanitation infrastruc- and one in eight people defecate sanitation, 600 million lack ture is necessary but will not be sufficient. Investments in the open (WHO and UNICEF access to an improved water will need to be accompanied by an equivalent invest- 2015). The consequences: every source, and another 1.2 billion ment in the policy “software.” This will call for greater minute a child dies of a water-re- drink unsafe water from an innovation and investment in the 3-I’s that will be lated disease (IMF 2015). “improved” source. Water, Well-Being, and the Prosperity of Future Generations 3 Map 1. Proportion of Population with Improved Sanitation 91–100% 76–90% 50–75% <50% Insu cient data or not applicable Source: WHO and UNICEF 2015. One of the four targets of Millennium Development And having met the MDGs of an improved water source Goal 7 (MDG-7) was to halve the proportion of the is no guarantee that the water provided is either acces- population that lacked access to safe drinking ­ sible or supplied continuously, that it meets the desired water  and basic s ­ anitation. Achieving it would health standards, or that the sanitary latrines built are likely  have  brought about greater development used or sustainable. There already are signs of regres- returns than any  other single intervention. This is sion on all these fronts. because water-related health shocks have direct impacts on incomes, assets, and earning capacities— These and other challenges on equity, affordabil- often lingering across generations. Although the tar- ity, and quality have motivated the post-2015 get for safe drinking water was achieved five years Sustainable Development Goals (SDGs). These ahead of the 2015 target date, the world fell behind on goals are even more ambitious than the MDGs, sanitation, missing that target by 700 million people. 2 with six targets aimed at assuring safe and sustain- able availability of water supply and sanitation for Despite Progress, Many all. As development continues at breakneck speed Challenges Remain in most developing countries and regions, the An emerging burden of disease caused by industrialization Millions of poor households world is faced with  an  ever more challenging coexists with diseases of were left behind. In India problem where  an emerging burden of disease underdevelopment. These for  example, nearly 80 per- caused by industrialization coexists with diseases emerging problems have cent of the poor ­ defecate of underdevelopment like diarrhea and undernu- received somewhat less in  the open, compared with trition. These emerging problems have received attention in the SDGs. just 8 percent of the ­wealthiest. somewhat less attention in the SDGs. 4 Water, Well-Being, and the Prosperity of Future Generations Map 2. Proportion of the Population with an Improved Water Source 91–100% 76–90% 50–75% <50% Insufficient data or not applicable Source: WHO and UNICEF 2015. Poverty Is Intertwined with Unsafe unsafe drinking water and sanitation is often a matter Water and Sanitation of life and death. Poverty is closely intertwined with access to ade- quate water and sanitation. Poverty makes water Inadequate sanitation, poor hygiene, and the lack of and sanitation services less affordable and accessi- access to enough clean water are linked to diarrheal ble, while inadequate water and sanitation services diseases, enteric infections, helminthes, and parasitic provoke conditions for waterborne diseases to infections. These diseases originate from human and thrive, inducing more poverty. The economic bur- animal feces that contaminate the open environment. den is significant through the effects on health and It is well known that some of the largest declines in productivity. Safety and dignity are also concerns, child deaths in the United States and Great Britain especially for girls and women. New evidence sug- came from investments in clean water and sanitation gests that the severity and extent of the effects of infrastructure (UNDP 2006). Indeed, child mortality poor water and sanitation on health and develop- increased in Great Britain for most of the second half of ment have been underestimated. the nineteenth century, despite a doubling of average income. It was not until major sanitation reforms in Myriad Effects of Unclean Water, Bad the late 1800s that life expectancy and child survival Sanitation, and Poor Hygiene on Health improved significantly (Cutler and Miller 2005). More and Development recently, the substantial health improvements The developed world takes clean water for granted, observed on Native American reservations in the but for hundreds of millions of the poor in less devel- United States have been attributed to piped water and oped countries, the difference between safe and sanitation (Watson 2006). Water, Well-Being, and the Prosperity of Future Generations 5 The tremendous global health burden of diarrheal barrier, Latrines that safely contain feces are a primary ­ disease falls disproportionately on young children. blocking them from entering the environment, where The World Health Organization (WHO) estimates they are transmitted by fingers, flies, fluids, fields, that 58 percent of diarrheal deaths are caused by and food. Handwashing with soap, especially after poor water, sanitation, and hygiene, killing 1,000 defecation, is another primary barrier. Treating water children each day (Prüss-Ustün et al. 2014). Poor that has become contaminated can eliminate these water and sanitation cause just under 1 percent of pathogens. all  Disability Adjusted Life Years (DALYs) globally (Lim et al. 2012). Vaccines can help protect against More than 1.7 Billion People Have Worms some of the most deadly forms of viral diarrhea, such Poor water and sanitation have other health conse- as  rotavirus and cholera (box 1). But diarrhea quences. Children, especially those of school age, and remains  one of the top three killers of infants and adults living in poor sanitary conditions, risk infection young children worldwide. Not all cases can be effec- by parasitic worms that live and breed in water and tively treated, suggesting that prevention remains a feces. More than 1.7 billion people are infected with top priority (Liu et al. 2012). hookworm, roundworm, and whipworm, with those Feces, and the pathogens they carry, can enter a per- in Asia at highest risk (Pullan et al. 2014). The infections son’s body through contaminated water, through flies are associated with anemia, listlessness, and stunted that rest on food, or through dirty shoes or soles of growth— symptoms that keep children out of school or the feet that come into contact with contaminated impair their academic performance and reduce their soil, bringing harmful pathogens into the home. earning potential (Miguel and Kremer 2004). Box 1. Cholera Afflicts 2.9 Million People a Year Cholera causes severe diarrhea and kills about 95,000 people a year, most of them children. An estimated 2.9 million cases of cholera occur each year in over one-third of countries worldwide where the disease is endemic (Ali et al. 2015). The fecal contamination of water or food transmits cholera. Clean water and sanitation are critical to preventing it from spreading. A promising oral cholera vaccine has enormous potential to protect those at risk, but this does not diminish the central importance of clean water, sanitation, and hygiene as long-term weapons in the fight against cholera. A coordinated approach is being taken, for instance, in the World Bank’s $50 million investment targeting cholera hotspots in Haiti. The project will provide 300,000 people with improved water sources and sanitation facilities. It will also strengthen the national cholera control program through support to epidemiological surveillance; joint training for water, sanitation, and health actors; and improve coordination with the Ministry of Health and Population (MSPP). These investments recognize that cholera control requires the effective integration of health and water and sanitation interventions, as well as an integrated approach to treatment at the health facility-level, provision of water treatment products, and community-level education and prevention campaigns. 6 Water, Well-Being, and the Prosperity of Future Generations Fecal Pathogens Assault the Gut The cumulative evidence from a variety of sources sug- Perhaps more critical to children’s well-being and life- gests links between height and exposure to pathogens time potential are the invisible infections that children caused by poor water (Fink, Gunther, and Hill 2011). The harbor in areas with poor water and sanitation. problem is especially prevalent in India where children Pathogens in the environment, especially fecal patho- born in Indian districts with high levels of open defeca- gens, constantly assault the gut. The infections dam- tion are shorter than their counterparts born elsewhere age the gut lining and deprive it of its ability to absorb in the country (Spears, Ghosh, and Cumming 2013). nutrients, leading to malnutrition. The small intestine Children in India are considerably shorter than children becomes more porous, and disease-causing pathogens in Africa, despite India’s higher GDP, and also shorter enter the bloodstream more easily, activating an than in Bangladesh, whose population is genetically immune response and diverting energy from human similar and also poorer than India (box 2). A higher inci- growth. Up to 43 percent of stunting may be due to dence of and exposure to open defecation in India and these silent infections (Guerrant et al. 2013). its higher population density may partially explain the apparent  South Asian Enigma of malnutrition—an Food May Do Little to Nourish unresolved paradox whereby despite higher GDP, South Malnutrition is a multifaceted problem that involves Asians fare worse on nutritional outcomes than many more than availability and affordability of food. countries in Africa with lower GDP (Ramalingaswami Infectious diseases such as diarrhea impede the absorp- et  al. 1997). The average Indian child  is exposed to tion of nutrients from food and determine nutritional more than 200 open defecators in the immediate neigh- status. An abundance of food may do little to nourish borhood of a square kilometer, while a counterpart in communities in contact with fecal germs, waterborne Chad is exposed to only seven (Coffey 2013). infections, and poor health and care practices. The Sanitation of Communities, Not Just Malnutrition can be widespread even in regions with Households, Needs to Be Improved plentiful supplies of affordable food and low-cost The majority of the benefit of improved sanitation ­ calories. Even near-universal coverage of the most effec- comes from a community’s access to sanitation, not tive nutrition interventions in high-burden countries just a household’s (Gunther and Fink 2010, Andres would make only a dent in resolving the stunting prob- et al. 2014). As population density and the number of lem (Bhutta et al. 2013). people defecating in the open in a given area increase, Stunting Kills 1 Million Children Each Year so do the negative health impacts, suggesting that risks vary spatially. Stunting is a particularly harmful symptom of malnu- trition because it is associated with irreversible effects Stunting would not matter much if the consequences on the body and brain. One-quarter of children under were restricted to stature. But it is also associated with five are stunted. The conditions of stunting interact severe and permanent cognitive deficits, impaired vac- with infectious disease to cause 1 million deaths each cine responses, obesity, chronic disease, and the inter- year (Black et al. 2013). Children who suffer from generational transmission of poverty (Guerrant et al. repeated bouts of diarrhea caused by poor water and 2013). The association between an individuals’ height sanitation have trouble absorbing nutrients, which can and earnings is robust, largely explained by cognitive in turn cause stunting. With its focus on diarrhea, pre- function. Healthier babies are better able to develop vious research has underestimated the health impacts their cognitive potential and accumulate more human of inadequate water and sanitation. capital, which translates into higher earnings. Even in Water, Well-Being, and the Prosperity of Future Generations 7 Box 2. Two Bengals—One Taller, One Shorter Children in West Bengal, India and in Bangladesh likely share the same genetic height potential, on average. Per capita incomes are higher in West Bengal than in Bangladesh, but Bangladesh has lower infant mortality, reflecting successful social investments. In West Bengal, higher wealth is reflected in a child population that is taller, on average. However, at each level of income or wealth, an average child in Bangladesh is taller than a counterpart in West Bengal. Why might this be so? Statistical evidence suggests that the differences in open defecation, controlling for wealth, can account for the differences in height. In Bangladesh, more than 80 percent of the population use latrines, while in West Bengal, the share is only about 50 percent. The height gap at any given level of wealth can be statistically “explained” by the open defecation gap (Ghosh et al. 2015). the United Kingdom, an extra inch of height is associ- individuals inflicted with illness, and by communities ated with a 1–2 percent increase in earnings, reflecting that must cope with elevated health risks. the effects of early childhood nutrition on future human capital (Case and Paxson 2008). There Are Many More Consequences The lack of clean water and sanitation facilities has Stunted Mothers Have Stunted Children other less well documented consequences. Poor Perhaps more concerning is that stunting and the pov- hygiene practices of birth attendants can cause erty induced by open defecation persist across genera- infection, sepsis, and infant and maternal mortality ­ tions. Stunted mothers are more likely to give birth to (Benova, Cumming, and Campbell 2014). Yet four of 10 stunted children (Spears 2012) because poor maternal health care facilities in Sub-Saharan Africa have no nutrition and exposure to infectious disease have source of clean water on the premises and soap for impacts even before a child is born—­ setting out a tra- handwashing is missing in one-third of them. Clean jectory of shorter growth over the  ­ lifetime (Victora water and soap are also critical for preventing and con- et al. 2010) and conditioning a child for worse health trolling the spread of infection, particularly outbreaks outcomes later in life (Barker 1990). such as Ebola and cholera (WHO and UNICEF 2015). Indeed, countries affected by the 2014 outbreak of Poor Water, Sanitation, and Hygiene Ebola in West Africa have some of the worst coverage Cost $260 Billion a Year of water, sanitation, and hygiene in the world, imped- The economic costs of poor water supply, sanitation, ing effective responses to epidemics. Many clinics that and hygiene are estimated at $260 billion a year, or routinely operated without running water were forced about 1.5 percent of the GDP of developing countries to close to avoid becoming hotbeds for the spread of (Hutton 2013). The bulk comes from the time lost fetch- disease. ing water, and to a lesser extent the time spent walking to sites for open defecation. Death and disease caused Access to water and sanitation has been found to by poor water and sanitation account for most of contribute to a reduction in a wide range of seem- the  rest—costs incurred by the health sector, by ingly unrelated diseases and to reduce the overall 8 Water, Well-Being, and the Prosperity of Future Generations background burden of disease. This is known as the Total Sanitation, Led By Mills-Reincke phenomenon (Segwick and Macnutt Communities? Behavioral change, at the level 1908). It may have its biological basis in the altered One way to change sanitary of individuals and communities, immune response and gut function caused by expo- is pivotal to realizing health practices, which has spread sure to fecal pathogens. outcomes of water and sanitation rapidly in the developing investments and is necessary world, is community-led total to reap the rewards of these sanitation (CLTS). This radical Remedies—Changing People’s Habits and investments. approach uses shock and Price Incentives shame to change social norms Why, despite decades of investment, do poor water, and behaviors and nudge entire communities to stop sanitation, and hygiene prevail? Perhaps because defecating in the open. Eschewing subsidies, it encour- water, sanitation, and hygiene influences health, wel- ages households to build basic latrines using locally fare, and development outcomes through complex available materials. This approach is credited with and multiple channels. Consider handwashing. It is moving most of Bangladesh from widespread open one of the most effective interventions for reducing defecation to household latrines. Bangladesh now out- diarrhea and child deaths, but it depends on an array of paces many other emerging economies in ending open preconditions. The household must have continuous defecation. access to a convenient supply of clean water; this is But CLTS has not enjoyed unequivocal success. harder to achieve when water is scarce. And hand- There is limited understanding of why CLTS works washing must take place frequently, and at certain better in some countries and circumstances than in junctures for it to work. others. In  Indonesia and Tanzania, which also Investments in infrastructure alone—which are still supported local  masons and retailers to ensure ­ far from adequate in many parts of the world—will not toilets were affordable, only small numbers of that ­ be enough to deliver the desired development out- households actually improved their sanitation comes. Behavioral change, at the level of individuals because of the intervention (Cameron, Shah, and and communities, is pivotal to realizing health ­outcomes Olivia 2013; Briceño, Coville, and  Martinez 2015). of water and sanitation investments and is necessary people continued to ­ In  India, ­ defecate in the open to reap the rewards of these investments. These behav- despite having  a toilet in  their home (Clasen 2014; iors are particularly relevant for ­non-piped, mostly rural, Patil 2014). Also in some parts of India, child systems where it is difficult and costly to  control height increased substantially, despite only modest contamination. improvements in village sanitation, suggesting health effects may be largely driven by changes in Despite evidence that shows that sanitation and defecation, as opposed to  infrastructure open ­ handwashing are of primary importance to maintain a improvement (Hammer and Spears 2013). clean environment, access to sanitation lags far behind that of water. Rates of handwashing are dis- mally low, even in high-income countries. A likely Simply Knowing about Good Hygiene reason is that both these require fundamental changes Is Not Enough to human behavior, and changing behavior is not Most people already know that washing their hands easy. How to do so effectively and efficiently remains or using a toilet for defecation is a necessary part of a challenge and ­ continues to occupy the minds of good hygiene and health (Curtis, Danquah, and ­policy makers. Aunger 2009), so they respond more strongly to Water, Well-Being, and the Prosperity of Future Generations 9 emotional appeals such as a desire to be clean and Subliminal Nudges Can Change Behavior modern, or a desire to nurture their children. Market Behavioral economics offers promising remedies researchers first try to find out what motivates peo- through subliminal nudges and other devices, but has ple to wash their hands or buy a toilet and then yet to be fully exploited to improve water, sanitation, appeal to these desires using print and media adver- and hygiene (Coville and Orozco 2014). Minor tweaks tising in an effort to “sell” better behaviors. Some go can sometimes be highly cost-effective. For example, a step further to get an audience’s attention, creat- loss-aversion is one technique that can be used to ing cartoon superheroes, staging live plays, and run- motivate change. People dislike losses more than they ning soap operas on national radio. These efforts like gains, so messages that highlight the costs and uniquely blend education and entertainment in losses of not washing hands are likely to be more effec- edutainment, which can be powerful in influencing tive (Kahneman and Tversky 1979). This is counter to social norms. In Brazil, soap operas are credited the predominant messaging in the sector, which with reducing the country’s fertility rate (Ferrera, emphasizes the health and other positive benefits of Chong, and Duryea 2012). The children’s show improved water and sanitation. Savings accounts that Sesame Street has even broached the topic of water require people to precommit to saving a certain and sanitation (box 3). amount or saving for a particular goal could be used to save for latrines, helping poor people resist the many Considerable effort goes into identifying features of temptations to spend their scarce funds. sanitation products that are important to local con- sumers at affordable prices to improve take up of san- Simple reminders can reinforce hygienic behaviors. itation interventions. What is considered a clean toilet People may have trouble remembering to treat their in rural Ethiopia may not pass the test in rural Vietnam. drinking water. And treating water can add to an already Indeed, it may come as a surprise to many that much heavy financial burden facing poor rural households. of the world has a preference for squatting rather than In rural Kenya, free chlorine dispensers at community sitting. These factors are remarkably important when water collection points address some of the behavioral designing sanitation interventions. biases and financial constraints that inhibit households Box 3. Sesame Street—Showing Children How to Wash Can Shift Mindsets, Behaviors, and Social Norms Sesame Street’s first Global Health Ambassador, Raya, was created to show kids, families, and communities about proper water, sanitation, and hygiene (WASH) routines like handwashing with soap and wearing footwear in the latrine. Sesame Street has learned that when children have the tools and information, they go from being just passive recipients of health information to active participants in their own health and well-being. Now, through the help of Raya, messages about the importance of WASH reach the most vulnerable kids in Bangladesh, India, and Nigeria. Identifying champions for children like Sesame Street’s popular characters, the Muppets, can thus be pivotal role. Complementing it with child-facing education through mass media and multiplatform community approaches creates unparalleled opportunities to shift mindsets, behaviors, and social norms. 10 Water, Well-Being, and the Prosperity of Future Generations from treating their water. The chlorine dispensers were making it more convenient and thus making behavior a reminder and made water treatment more convenient. change more likely (Gertler et al. 2015). Reducing open Making water treatment public, the dispensers added defecation in a community also generates positive an element of social pressure (Kremer et al. 2009). health spillovers, justifying the subsidies. Ensuring that these subsidies are well targeted is key. Sometimes, a Nudge Isn’t Enough In many developing countries, a large proportion of Sometimes, information and behavioral nudges are the poor, particularly in urban slums, source water not enough to trigger behavioral change, especially from informal vendors. They are compelled to pay a when it requires costly durable goods, as for sanita- higher price—often 10 times more than the higher-­ tion. The poor find it difficult to purchase goods requir- income populations that are serviced by the munici- ing large lump sums of cash and consistently cite the pality at prices below service costs (Petrie 1989). It is high cost of sanitation as the main barrier to installing tempting to justify subsidies on the grounds that water improved toilets (Banerjee and He 2003). In such cases, is a necessity and human right. But the poor seldom price incentives may be needed. get this benefit, paying on average a greater proportion of their disposable income for such services, compared Smoothing Consumption Can Help to their wealthier counterparts (Zetland and Gasson Stabilizing income and spreading payments over time 2012; Komives et al. 2005). can encourage the poor to adopt beneficial durable goods such as household latrines (Dupas 2011). Even when the poor are connected, subsidies for Consumer credit has increased the take-up of piped water tend to be highly regressive, typically favoring water connections (Devoto et al. 2011), clean cook- the better-off with subsidies related to the volume of stoves (Levine et al. 2012), and insecticide-treated bed- water consumed (figure 1). Free water paradoxically nets (Tarozzi et al. 2014). Experimental evidence of ends up costing the poor more of their resources consumer lending for sanitation is limited, particularly and their health. among poorer households. In Cambodia, households were randomly offered financing to purchase a latrine Solutions, Information, and Resources at the market price of $50, dramatically increasing Are Lacking uptake (Shah et al. 2013). In Vietnam, the Vietnam Bank Inequalities in access also relate to gender and geogra- for Social Policy financed septic tanks and sewerage phy, often stemming from a lack of technical ­solutions, connections for low-income households. In India and a lack of information, or a lack of resources. It is sur- Tanzania, microfinance institutions provided direct prising that information on who the poor are, where microloans for toilets (Trémolet, Kolsky, and Perez they live and their level of access is not consistently 2010). Socially oriented microfinance institutions can generated or used at the country level to inform ser- increase access for the poor to sanitation by offering vice delivery. Simple visual tools can be used to map small loan sizes and making application processes levels of access with other population characteristics more flexible (Trémolet, Mansour, and Muruka 2015). such as poverty levels or prevalence of undernutri- tion. These can be extremely effective in dialogue So Can Targeted Subsidies with client countries, but are not yet widely available. Some households will never have enough cash to afford a toilet. Subsidies may be their only means of The fundamental technology of the toilet and waste acquiring adequate sanitation. Subsidies lower the management has been around for decades. But cost for households to practice healthy behaviors, the  technology has limitations, especially when Water, Well-Being, and the Prosperity of Future Generations 11 Figure 1. Share of Subsidy Captured by the Poorest or water scarcity (UNEP 2008). For many countries— 20% and Richest 20% of the Population especially in Africa, the Middle East, and South Asia— climate change is likely to compound this baseline 50 scarcity. 40 At the same time, water quality is low and getting worse. It is uniformly declining in all developing coun- Percent of subsidy 30 tries—in some cases to the point of irreversible damage. Water resources are further degraded by the “pollution 20 plume” of cities, industry, and intensive agriculture— contamination that includes both chemical pollutants 10 (fluoride, iron, nitrate, arsenic, and the like) and micro- bial (feces) pollutants. Even developed countries man- 0 age to treat only a fraction of their sewage. Bottom 20% Top 20% Water constraints in the form of quantity and quality Source: Komives et al. 2005. foreshadow a new burden the poor will be faced with Note: Countries in the sample are Cabo Verde, Nepal, and Nicaragua. in the future, with consequences for health, liveli- hoods, and economic development. considering the decline in water resources, and the Water Efficiency Is Low and Declining immense unmet need for sanitation in rural areas. Too many of the most water-stressed countries (in Innovators have recently begun to develop new ways Central Asia, the Middle East, and North Africa) are to deal with human waste that operate without water, the  least efficient users of water; efficiency is even pipes or electricity and produce valuable resources declining in some cases. Policies that promote and such as clean water, electricity and fertilizer. Equally condone overuse and waste make such natural scar- important, these new technologies are aiming for low- city worse. For example, water is provided to large- cost production that is affordable to poor households. scale industrial and agricultural users at no cost or highly subsidized rates, so there is little incentive to A New Generation of Challenges economize on its use. In highly water-stressed regions, baseline growth projections will not be achievable In 10 Years, 2.8 Billion People Will Face without significant changes in the way water is man- Water Stress or Even Scarcity aged. But because water scarcity emerges gradually, Water constraints in developing countries are set to with often invisible (for now) consequences, responses worsen with population growth, urbanization, and ris- can be put off. ing living standards. Twenty developing countries have renewable water resources of less than 1,000 So the world is faced with a problem compounded cubic meters per capita— by looming water shortages, and declining water qual- defined as water scarcity—and ity before the poor have even been fully covered. As The world is faced with a problem another 18 have less than the SDGs move the goalpost to universal coverage, compounded by looming water 2,000—defined as water stress. global shortages will become even more likely as more shortages and declining water A decade from now, an esti- and more people gain access. Much of the burden will quality before the poor have even mated 2.8 billion people in 48 fall on the poor, who end up having to pay for the prof- been fully covered. countries will face water stress ligacy of others. 12 Water, Well-Being, and the Prosperity of Future Generations Chemical and Microbial Contaminants contaminated the problem worse by drawing arsenic-­ Need to Be Contained water into previously uncontaminated aquifers, with Most ground and surface water in densely popu- potentially disastrous consequences for future genera- lated developing countries is contaminated with a tions (Van Geen et al. 2013). combination of microbial pathogens and chemicals contaminants from human waste, agriculture, mining, Water Treatment Needs to Become a Priority and industry. Governments at all levels rarely consider water treat- ment a priority, partly because the benefits are largely Many of the world’s poor urban residents rely on non- invisible to beneficiaries, while the investments are piped systems for sanitation. Rarely treated, the fecal capital intensive and operating and maintenance costs sludge is left to accumulate or is discharged directly are high. Treating contaminated water is one solution, into drains or open water bodies. Solid waste is dis- but is of limited value where cost-effective (or any) posed of in unhygienic ways, dumped into the sea, riv- treatments are not available. It is often more cost ers, wasteland, and landfills. Chemical and microbial effective to give polluters incentives to mitigate emis- pollutants from poorly maintained pit latrines can also sions at the source. This entails sophisticated policies seep into groundwater. In urban settings where even such as the pollution permits issued by the U.S. just a handful of households defecate in the open, most Environmental Protection Agency that place the onus waste is disposed of in unsafe manner (see figure 2). of mitigation on the polluter. Trials for such polices have not been conducted in developing countries, but A sanitation value chain—that hygienically captures, given the size of the problem, interest is growing. stores, transports, treats, and disposes of waste and that connects with markets for reuse—redefines access Surprisingly few data are systematically collected on to sanitation as access that goes beyond simply provid- water quality trends, nor is there an accepted mea- ing a toilet. Each stage of the value chain is a ­ service sure to compare how countries perform on water that helps ensure access to safe and reliable sanitation. quality. Poor data coverage and quality are largely to blame, but there are also problems with measure- Few studies record the health consequences of chemical ment, standards, and definitions that undermine pollution, which are associated with long-term exposure global indexing efforts. Even the United Nations to pollutants, and may include gastrointestinal illness; Global Environmental Monitoring Systems (UN reproductive problems; toxic effects on the nervous, GEMS)—the only global database of national water digestive, and immune systems; and on lungs, kidneys, quality parameters—relies on self-reported data and skin, and eyes, as well as neurological disorders. lacks spatial representativeness and comparability over time and space. Fluoride and arsenic are the most commonly measured chemical contaminants, likely affecting millions of So there is no consistent way of tracking and mea- people. High levels of naturally occurring arsenic con- suring a growing problem. The Joint Monitoring taminates large areas of groundwater, especially in Program (JMP) run by the World Health Organization East and South Asia, leading to changes in the skin’s (WHO) and United Nations Children’s Fund pigment and structure as well as various forms of (UNICEF) is developing rapid, reliable, and cost-​ 3 ­ cancer. An estimated 226 million people in more than effective tests that can be administered alongside 100 countries are exposed to harmful levels of arsenic household surveys to monitor water quality, but in groundwater—the “largest mass poisoning of a pop- these are still in a pilot phase and cover only a sub- ulation in history” (WHO 2000). Private wells can make set of indicators that relate to biological pollutants. Water, Well-Being, and the Prosperity of Future Generations 13 Figure 2. Flow of Fecal Sludge in Dakar, Senegal Reuse/ Containment Emptying Transport Treatment Disposal Leakage WC to sewer Not e ectively treated E ectively Legally 21% treated dumped Safely Not emptied e ectively Illegally treated dumped On-site facility Unsafely emptied Safely abandoned 10% when full Open defecation 2% 29% 10% 5% 6% 17% Residential Drainage Receiving environment system waters Source: World Bank/WSP 2014. Note: WC = water closet. Without adequate information, benchmarking is Financial Sustainability—Decide Who difficult, limiting evidence-based policy because of Gets Water and What They Pay lack of comparable data. Recognizing the role of water as a valuable economic input can ensure more equitable access and more sus- tainable supplies. Delivering good quality services Sustaining Gains requires service providers to be accountable and Water and sanitation management has traditionally responsive to community needs. But they must at the been approached as an engineering problem. It must minimum be allowed to recover operation and mainte- now be viewed through a lens of financial, environ- nance costs and make a predetermined profit—or they mental, and behavioral sustainability. will have no funds to make capital investments. 14 Water, Well-Being, and the Prosperity of Future Generations Pricing. Pricing can convey information about scar- 70–80 percent of water, especially in more arid areas, city  and abundance. In the European Union, water will need to concede water to other economic sectors. ­ consumption declined by about 30 percent when Countries thus need to decouple water from their users  were charged higher service fees to cover run- growth aspirations and development goals. Surprisingly, ning costs. Given the “human right” view of access to the more arid countries tend to be the more inefficient water, pricing can be a very sensitive issue. But such a and intensive users of water, with a disproportionate right does not mean that governments or other players reliance on the more water-dependent sectors of the need to provide services to those who can afford them economy—agriculture, textiles, and mining. To decou- at no charge. Service providers must be properly com- ple growth from water, these economies will need pensated, for quantity and quality. mechanisms that allocate water to more productive Mechanisms have been piloted to reconcile equity and uses. Australia, an exemplar, has pioneered penalizing financial sustainability. Block tariffs—which increase wastage and overuse of water, while encouraging a shift the cost increases along with the volume used—are one to higher value added uses. Chile has a similar approach, way of ensuring a fair baseline access. Another is tar- with successful results (World Bank 2016). geting cash subsidies or free water to those below a Environmental Sustainability—Consider Chemical certain income threshold. Contaminants and Microbial Pathogens Where utilities are heavily subsidized, decisions on Many developing countries now face a dual burden who gets served and on quality becomes politicized, from waterborne diseases: diseases of underdevelop- nearly always to the detriment of the poor—who end ment like diarrhea and diseases of development from up paying more. Full cost recovery for water utilities industrial pollutants. The new hazards typically take can thus ensure more equitable access to water. the form of chemical pollutants that are much harder and more expensive to treat than sewage. And they Recovering costs. Recovering costs is also essential for require different processes, akin to technically com- operating and maintaining expensive water supply and plex desalination techniques. It is often cheaper to sanitation investments. Short-term savings are a false mitigate the pollution at the source, rather than seek- economy and can shorten asset life. This is particularly ing “end-of-pipe” solutions. devastating in the area of water supply and sanitation, in The health effects of persistent organic pollutants which the assets are expensive, capital intensive, and long (POPs) are especially worrying. They do not decay, and lived (pipes can last for more than 100 years). Investment they accumulate and transfer from one species to the costs are therefore recovered over decades, and some- next through the food chain. Because they can be trans- times over generations, so the private sector has virtually ported through water, most POPs generated in one no natural incentive to invest in such risky endeavors. The country can affect people and wildlife far from where uncertain (and politically determined) flow of future rev- they are released. That is one reason why the Stockholm enue is the only attraction—and a limited one. Convention on POPs seeks to discourage their use. But Allocating to the highest value. Viewing water as an eco- where toxins carry only local footprints, there are no nomically valuable resource also implies that it should global agreements. Addressing these local issues has be allocated to uses that generate the highest value. proven difficult because it calls for investments in mon- With growing pressures on water resources, this means itoring, mitigation, and new infrastructure (to contain that eventually agriculture, which typically consumes and clean pollutants when mitigation is infeasible). Water, Well-Being, and the Prosperity of Future Generations 15 Behavioral Sustainability—Shift from adverse impacts of poor water and sanitation, such as Daily Practices to Enduring Habits higher rates of infection during birth due to poor The behaviors that underlie hygiene are practiced hygiene practices. multiple times a day, and every day over a lifetime. So Addressing the water and sanitation challenge will it is especially important for these behavioral practices be pivotal to achieving poverty reduction goals in to become entrenched to avoid reverting to former many developing countries. Meeting the new ambi- ways, as in times of crisis or extreme hardship. tious water and sanitation targets of the SDGs will Changing behavior is a process, not a single event. It require adopting an integrated perspective to water requires reaching minds at an early age, so that behav- resources. It must address both the expanding water iors become practices, which later become habits that deficits as well as the degradation of water resources endure into adulthood. It may also require societal through pollutants and destruction of watersheds, shifts in what is considered acceptable and normal especially in countries where water scarcity and behavior—where the behavioral drivers that dictate stress is growing. water, sanitation, and hygiene practices are deeply The solution to these multifaceted problems is not embedded in the social fabric. straightforward. Human behavior—safe storage of drinking water, use of latrines, handwashing—largely Conclusion mediates the effects of water and sanitation infrastruc- This document has provided a brief overview of the ture, especially where infrastructure is of lower quality. health-related impacts of inadequate water supply Behavior change has become a vital ingredient in the and sanitation services. It has emphasized the new elusive search for solutions. Spending on infrastructure policy challenges that have emerged in a more popu- alone— which is still far from adequate in many parts of lated, polluted, and urbanized world with finite water the world—will not be enough. New approaches are resources. The challenges are significant. A substan- required that assure sustained changes in individual tial shift in policies and investments is needed to meet behavior, more equitable access to services, and incen- the global goals of poverty reduction and access to tives for improved water resource stewardship, espe- water supply and sanitation envisaged in the new cially where water scarcity is growing. Sustainable Development Goals (SDGs). Notes The evidence is overwhelming that water-related dis- 1. 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