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The Free Rider Problem in Community-Based Rural Water Supply: A Game Theoretic Analysis

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  • Matthew Breier
  • Martine Visser

    () (School of Economics, University of Cape Town)

Abstract

Community-based water supply projects in rural South Africa have frequently proved unsustainable, with many communities unable to raise sufficient funds to meet operation and maintenance costs. A key obstacle to cost recovery (and the focus of this paper) is the free rider problem. As rural water services are frequently supplied as a public good, the link between paying for water and receiving it is not as straightforward as it is for private goods, and beneficiaries may have a material incentive to 'free ride' on the good's production. Using a simple game-theoretic model, we identify and discuss the value of social sanctioning in deterring free riding. We conclude that social norms that generate costly punishment, such as norms of fairness may be necessary (but not sufficient) to deter free riding. We emphasise the importance of community mobilisation, social intermediation and institution building in overcoming the free rider problem.

Suggested Citation

  • Matthew Breier & Martine Visser, 2006. "The Free Rider Problem in Community-Based Rural Water Supply: A Game Theoretic Analysis," SALDRU Working Papers 5, Southern Africa Labour and Development Research Unit, University of Cape Town.
  • Handle: RePEc:ldr:wpaper:5
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    File URL: http://opensaldru.uct.ac.za/bitstream/handle/11090/49/06_05.pdf?sequence=1
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    Cited by:

    1. Nicola Branson, 2006. "The South African Labour Market 1995-2004: A Cohort Analysis," SALDRU Working Papers 7, Southern Africa Labour and Development Research Unit, University of Cape Town.

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