Policy Note: Systems Thinking for More Holistic Analysis of Low- and Middle-Income Country Water Utility Problems and Solutions

Globally, billions of people rely on piped water and sanitation services delivered by municipal water utilities, but many of these systems, particularly in low- and middle-income countries (LMICs) are plagued by chronic problems of inequitable access, intermittent supply, and poor water quality. While improving service quality in these persistently underperforming systems will certainly require substantial infrastructure investment and supportive maintenance, a parallel strengthening of utilities and regulators’ capacity and management is at least as fundamental. And though prior research highlights the lack of capacity, misaligned incentives, and ineffective policies that lead LMIC utilities to perform so poorly, the identification of sustainable and replicable solutions to these problems, that extends beyond a small set of cases, has proven difficult. This paper argues for greater use of systems dynamics models to facilitate more holistic thinking about the potential of different intervention strategies, acknowledging that the behavior of utility-based water management systems is defined by complex interactions. This complexity plays out in reinforcing and balancing feedback between variables, lagged responses, and dynamics that often preclude moving past critical thresholds that define poverty or low performance traps. The paper then discusses how several basic archetypes relate to experiences of institutional reform failure and success described in the broader literature, with the goal of motivating future application of these methods for comparative analysis of different utility water system improvements.