Securing a conducive environment for WASH markets: the role of local government

Anna Gero; Juliet Willetts

doi:10.3362/1756-3488.18-00026

Securing a conducive environment for WASH markets: the role of local government

Local governments play critical, yet under-recognized, roles in supporting or constraining the development of emerging water, sanitation, and hygiene (WASH) markets. The focus of market approaches to date has been primarily on small-scale businesses and social enterprises themselves, rather than on addressing the broader institutional environment.
This study, drawing on experiences in Vietnam, Cambodia, and Indonesia, examined the political economy affecting support to WASH market actors, including the perspective and role of local governments. Semi-structured interviews were conducted with rural water supply enterprises and sanitation entrepreneurs, non-governmental organizations, and government officials. Qualitative analysis yielded key themes as regards political economy dynamics and identification of a breadth of pertinent roles for local governments. This study formed part of a larger research initiative funded through the Australian aid programme, focused on small-scale enterprise and led by the University of Technology Sydney.
The findings demonstrate important local government roles, including: training and business development support to enterprises; linking demand and supply by promoting local enterprises; supporting associations of entrepreneurs; providing targeted subsidies or financing to catalyse private sector engagement or to facilitate access for the poor and disadvantaged; and setting and monitoring quality standards and accreditation of products and services. In particular, balancing an enabling or supporting role with the need to ensure appropriate regulatory functions are in place provided a point of tension (and sometimes confusion) for local governments. Key motivators driving local government engagement with enterprises included coverage targets. Various constraints limited their support, including lack of clarity on their role, availability of relevant skills, and perceptions that WASH market systems and private sector engagement should arise spontaneously.
These findings inform gaps in development agency programming when it comes to WASH markets in terms of the need to work more strategically with local government actors, rather than solely directing efforts towards enterprises themselves. This study suggests a way forward in progressing more systemic interventions to support WASH markets in ways that facilitate local governments and related stakeholders to play more effective roles and achieve greater and more equitable development outcomes.

Bos, R., Alves, D., Latorre, C., Macleod, N., Payen, G., Roaf, V. and Rouse, M. (2016) Manual of the Human Rights to Safe Drinking Water and Sanitation for Practitioners, International Water Association Report, London, UK.

Davis, J. (2005) ‘Private-sector participation in the water and sanitation sector’, Annual Review of Environment and Resources 30: 145–53 <doi.org/10.1146/annurev.energy.30.050504.144635>.

Devine, J. and Kullman, C. (2011) Introductory Guide to Sanitation Marketing, Water and Sanitation Program Scaling Up Rural Sanitation, Water and Sanitation Program, World Bank.

Gero, A., Carrard, N., Murta, J. and Willetts, J. (2014a) ‘Private and social enterprise roles in water, sanitation and hygiene for the poor: a systematic review’, Journal of Water, Sanitation and Hygiene for Development 4(3): 331–45 <doi.org/10.2166/washdev.2014.003>.

Gero, A. and Willetts, J. (2014) ‘Incentives for enterprise engagement in Vietnam’, Private and social enterprise engagement in water and sanitation for the poor – Working Paper 2b, Institute for Sustainable Futures, University of Technology Sydney.

Gero, A., Doan Trieu, T., Mohr, S., Rickwood, P., Halcrow, G. and Willetts, J. (2014b) ‘Relying on markets to address human rights: sanitation supply chain analysis in low-density settings’, 37th WEDC International Conference, Hanoi, Vietnam, 2014.

Harris, D. (2013), ‘Applied political economy analysis: a problem-driven framework’, Overseas Development Institute (ODI), London.

Hulton, P., Barron, A. and Bryson, D. (2012) ‘Cross country differences in attitudes to business associations during the 2007–2010 recession’, Journal of World Business 47: 352–61 <doi.org/10.1016/j.jwb.2011.05.003>.

Mason, N., Matoso, M. and Smith, W. (2015) Private Sector and Water Supply, Sanitation and Hygiene, ODI Report, ODI, London.

Murta, J. and Willetts, J. (2014) ‘Incentives for enterprise engagement in Indonesia’, Private and social enterprise engagement in water and sanitation for the poor – Working Paper 2a, Institute for Sustainable Futures, University of Technology Sydney.

Murthy, S.L. (2013) ‘The human right(s) to water and sanitation: history, meaning, and the controversy over privatization’, Berkeley Journal of International Law 31(1): 89–147 <doi.org/10.15779/Z38665F>.

Ostrom, E. (2011) ‘Background on the institutional analysis and development framework’, The Policy Studies Journal 39(1): 7–27 <doi.org/10.1111/j.1541-0072.2010.00394.x>.

Sato, Y. (2013) ‘Development of small and medium enterprises in the ASEAN economies’, in R. Sukma and Y. Soeya (eds.), Beyond 2015: ASEAN-Japan Strategic Partnership for Democracy, Peace, and Prosperity in Southeast Asia, pp. 154–81, Japan Centre for International Exchange, Tokyo.

Sy, J., Warner, R. and Jamieson, J. (2014) Tapping the Markets: Opportunities for Domestic Investments in Water and Sanitation for the Poor, World Bank, Washington DC.

Teckchandani, A. (2014) ‘Do membership associations affect entrepreneurship? The effect of type, composition, and engagement’, Nonprofit and Voluntary Sector Quarterly 43(2S): 84S–104S <doi.org/10.1177/0899764013502580>.

Whaley, L. and Cleaver, F. (2017) ‘Can “functionality” save the community management model of rural water supply?’ Water Resources and Rural Development 9: 56–66 <doi.org/10.1016/j.wrr.2017.04.001>.

Willetts, J., Murta, J., Gero, A., Carrard, N. and Harris, D. (2015) ‘Political economy influences on enterprise engagement in Indonesia, Vietnam and Timor-Leste’, Water, Sanitation and Hygiene Services Beyond 2015: Improving Access and Sustainability – 38th WEDC International Conference, Loughborough University, UK, 2015.

Willetts, J., Murta, J., Gero, A. (2016), ‘Water and sanitation entrepreneurs in Indonesia, Vietnam and Timor-Leste: traits, drivers and challenges’, Enterprise in WASH – Working Paper 4, Institute for Sustainable Futures, University of Technology Sydney.

Willetts, J., Gero, A., Susamto., A.A., Sanjaya, R., Trieu, T.D., Murta, J. and Carrard, N. (2017) ‘Sanitation value chains in low density settings in Indonesia and Vietnam: impetus for a rethink to achieve pro-poor outcomes’, Journal of Water Sanitation and Hygiene for Development 7(3): 445–54 <doi.org/10.2166/washdev.2017.141>.

Willetts, J. and Powell, B. (2017) ‘Financing sanitation: finding a middle path to reach the poor – learning brief from the East Asia Regional Learning Event’, Civil Society Water, Sanitation and Hygiene (WASH) Fund, Vietnam.