Reducing nonpayment for public utilities: Experimental evidence from South Africa

Nonpayment for public utilities is an important constraint to expanding service access in developing countries. What are the causes of nonpayment and which policies are effective at addressing them? To study these questions, we implement and evaluate a randomized water education campaign in a low income peri-urban area in South Africa. We estimate substantial short-run treatment effects: on the order of a 25% increase in payments over a three-month period after which the effect dissipates. The evidence shows that the treatment did not operate by increasing consumers’ information, or by creating reminders to pay or a threat of enforcement. Instead, households may have reciprocated the provider’s efforts by paying more. Our findings provide evidence that strategies other than increased enforcement can lower nonpayment.