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Sources of successful cost recovery for water: Evidence from a national survey of South African municipalities

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  • Rod Alence

Abstract

This article analyses variation in municipal cost recovery for water services in South Africa. It uses original data from a national survey of municipalities, conducted in late 2000. A multivariate causal model is estimated to measure the effects of social and institutional context, service infrastructure, and billing and payment practices. The analysis shows that cost-recovery outcomes vary widely and are quite sensitive to factors that can be influenced by municipal decision-makers. Substantive implications for a typical South African municipality are clarified through simulations of the effects of upgrading infrastructure, introducing various cost-recovery measures, and extending basic services to poor households. As profound changes in the institutional and policy environment--including municipal restructuring (demarcation) and the 'free basic water' policy--force municipalities to review their cost-recovery strategies, the article offers insights into how to achieve the best possible outcomes.

Suggested Citation

  • Rod Alence, 2002. "Sources of successful cost recovery for water: Evidence from a national survey of South African municipalities," Development Southern Africa, Taylor & Francis Journals, vol. 19(5), pages 699-717.
    • Handle: RePEc:taf:deveza:v:19:y:2002:i:5:p:699-717
    DOI: 10.1080/03768835022000019310
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    References listed on IDEAS

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    1. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
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    Cited by:

    1. Mitlin, Diana, 2004. "Beyond Second Best: The Whys, Hows and Wherefores of Water Subsidies," Centre on Regulation and Competition (CRC) Working papers 30700, University of Manchester, Institute for Development Policy and Management (IDPM).

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