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Financing Municipal Water and Sanitation Services in Nairobi’s Informal Settlements

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  • Aidan Coville
  • Sebastian Galiani
  • Paul Gertler
  • Susumu Yoshida

Abstract

We estimate the impacts of two interventions implemented as field experiments in informal settlements by Nairobi’s water and sanitation utility to improve revenue collection efficiency and last mile connection loan repayment: (i) face-to-face engagement between utility staff and customers to encourage payment and (ii) contract enforcement for service disconnection due to nonpayment in the form of transparent and credible disconnection notices. While we find no effect of the engagement, we find large effects of enforcement on payment. We also find no effect on access to water, perceptions of utility fairness or quality of service delivery, on the relationships between tenants and property owners, or on tenant mental well-being nine months after the intervention. To counterbalance the increase in payments, property owners increased rental income by renting out additional space. Taken together these results suggest that transparent contract enforcement was effective at improving revenue collection efficiency without incurring large social or political costs.

Suggested Citation

  • Aidan Coville & Sebastian Galiani & Paul Gertler & Susumu Yoshida, 2020. "Financing Municipal Water and Sanitation Services in Nairobi’s Informal Settlements," NBER Working Papers 27569, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:27569
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    More about this item

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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