Several studies have sought to evaluate the economic costs and benefits of investing in sanitation. These studies highlight the economic gains associated with improved sanitation, raising awareness among decision-makers of the importance of such investments. To increase our understanding of the sanitation sector, however, it is critical to go further and apply economics to the analysis of how sanitation markets work or, more often, fail, so as to identify potential improvements. Sustainable sanitation requires that several mutually dependent services be provided, including collection, transport, treatment, and reuse. In each of these segments, service delivery is often inadequate due to failures either on the demand or on the supply side. Investments by households or service providers are driven by their own perception of economic benefits rather than macroeconomic arguments. This paper argues that economics can be used to evaluate what drives decisions across all these segments and support public policymaking to ensure access to sustainable sanitation services.

AECOM and Sandec (2010) A Rapid Assessment of Septage Management in Asia, Bangkok: United States Agency for International Development.

AMCOW/WSP (2011) Pathways to Progress - Transitioning to Country-Led Service Delivery Pathways to Meet Africa's Water Supply and Sanitation Targets, Washington, DC: World Bank/Water and Sanitation Programme.

Asano, T. (2002) ‘Water from (waste)water - the dependable water resource’, Water Science and Technology 45(8): 23-33 <www.ncbi.nlm.nih.gov/pubmed/12019829≯. www.ncbi.nlm.nih.gov/pubmed/12019829

Banerjee, S. and Morella, E. (2011) Africa's Water and Sanitation Infrastructure: Access, Affordability, and Alternatives, Washington, DC: World Bank.

BPD (Building Partnerships for Development) (2008) Sanitation Partnerships: Dar es Salaam Case Study, London: BPD.

Diener, S., Zurbrügg, C. and Tockner, K. (2009) ‘Conversion of organic material by black soldier fly larvae establishing optimal feeding rates’, Waste Manag Res 27: 603-10 <http://dx.doi.org/10.1177/0734242X09103838≯.

Eales, K. (2005) Bringing Pit Emptying Out of the Darkness: A Comparison of Approaches in Durban, South Africa, and Kibera, Kenya, London: BPD.

Ecopsis (2011) Roll-Out Evaluation of ‘Community Led Total Sanitation’ in West and Central Africa, Geneva: UNICEF WCARO.

Esrey, S. (1996) ‘Water, waste, and well-being: a multicountry study’, American Journal of Epidemiology 143 (6): 608-23 <www.ncbi.nlm.nih.gov/pubmed/8610678≯. www.ncbi.nlm.nih.gov/pubmed/8610678

Hutton, G. (2012) Global Costs and Benefits of Drinking-water Supply and Sanitation Interventions to Reach the MDG Target and Universal Coverage, Geneva: World Health Organization.

Hutton, G., Haller, L. and Bartram, J. (2007) Economic and Health Effects of Increasing Coverage of Low Cost Household Drinking Water Supply and Sanitation Interventions, Background Document to the ‘Human Development Report 2006’ UNDP 2007, Geneva: WHO.

Jackson, B. (2004) Sanitation and Hygiene in Kenya: Lessons on What Drives Demand for Improved Sanitation, Nairobi: WSP.

Jenkins, M. and Sugden, S. (2006) ‘Rethinking sanitation: lessons and innovation for sustainability and success in the new millennium’, Human Development Report Office - Occasional Paper, New York: UNDP.

Mbéguéré, M., Gning, J., Dodane, P. and Koné, D. (2010) ‘Socio-economic profile and profitability of faecal sludge emptying companies’, Resources, Conservation and Recycling 54: 1288-95 <http://dx.doi.org/10.1016/j.resconrec.2010.04.008≯.

Mikhael, G. (2011) Assessment of Faecal Sludge Emptying Services in Freetown, Sierra Leone, Freetown: GOAL.

Ministry of Urban Development (2008) National Urban Sanitation Policy, New Delhi: Government of India.

Prüss-Üstün, A., Bos, R., Gore, F. and Bartram, J. (2008) Safer Water, Better Heath: Costs, Benefits and Sustainability of Interventions to Protect and Promote Health, Geneva: WHO.

pS-Eau and MDP (2003) Enterprises Providing Mechanical Emptying of On-site Sanitation Systems in Major African Cities, Chateauneuf de Gadagne, France: Programme Solidarité Eau and Municipal Development Partnership.

Sandec (2006) Urban Excreta Management - Situation, Challenges and Promising Solutions, Dakar: Sandec.

Trémolet, S. (2012) Small-scale Finance for Water and Sanitation, Stockholm: European Union Water Initiative and SHARE.

Trémolet, S. and Binder, D. (2013) Evaluating the Effectiveness of Public Finance for Household Sanitation in Dar es Salaam, Tanzania, London: WaterAid <www.wateraid.org/~/media/Publications/Dar-es-Salaam-sanitation-report.ashx≯. www.wateraid.org/~/media/Publications/Dar-es-Salaam-sanitation-report.ashx

Trémolet, S. and Evans, B. (2010) OBA Working Paper Series (Paper No. 10): Output-Based Aid for Sustainable Sanitation, Washington, DC: The Global Partnership on Output-Based Aid.

Trémolet, S. and Kumar, R. (2013) Evaluating the Potential of Microfinance for Sanitation in India, London: SHARE.

Waddington, H., Snilstveit, B., White, H. and Fewtrell, L. (2009) Water, Sanitation and Hygiene Intervention to Combat Childhood Diarrhea in Developing Countries, New Delhi: International Initiative for Impact Evaluation.

WHO (World Health Organization) (2008) The Global Burden of Disease: 2004 Update, Geneva: WHO.

AECOM and Sandec (2010) A Rapid Assessment of Septage Management in Asia, Bangkok: United States Agency for International Development.

AMCOW/WSP (2011) Pathways to Progress - Transitioning to Country-Led Service Delivery Pathways to Meet Africa's Water Supply and Sanitation Targets, Washington, DC: World Bank/Water and Sanitation Programme.

Asano, T. (2002) ‘Water from (waste)water - the dependable water resource’, Water Science and Technology 45(8): 23-33 <www.ncbi.nlm.nih.gov/pubmed/12019829≯. www.ncbi.nlm.nih.gov/pubmed/12019829

Banerjee, S. and Morella, E. (2011) Africa's Water and Sanitation Infrastructure: Access, Affordability, and Alternatives, Washington, DC: World Bank.

BPD (Building Partnerships for Development) (2008) Sanitation Partnerships: Dar es Salaam Case Study, London: BPD.

Diener, S., Zurbrügg, C. and Tockner, K. (2009) ‘Conversion of organic material by black soldier fly larvae establishing optimal feeding rates’, Waste Manag Res 27: 603-10 <http://dx.doi.org/10.1177/0734242X09103838≯.

Eales, K. (2005) Bringing Pit Emptying Out of the Darkness: A Comparison of Approaches in Durban, South Africa, and Kibera, Kenya, London: BPD.

Ecopsis (2011) Roll-Out Evaluation of ‘Community Led Total Sanitation’ in West and Central Africa, Geneva: UNICEF WCARO.

Esrey, S. (1996) ‘Water, waste, and well-being: a multicountry study’, American Journal of Epidemiology 143 (6): 608-23 <www.ncbi.nlm.nih.gov/pubmed/8610678≯. www.ncbi.nlm.nih.gov/pubmed/8610678

Hutton, G. (2012) Global Costs and Benefits of Drinking-water Supply and Sanitation Interventions to Reach the MDG Target and Universal Coverage, Geneva: World Health Organization.

Hutton, G., Haller, L. and Bartram, J. (2007) Economic and Health Effects of Increasing Coverage of Low Cost Household Drinking Water Supply and Sanitation Interventions, Background Document to the ‘Human Development Report 2006’ UNDP 2007, Geneva: WHO.

Jackson, B. (2004) Sanitation and Hygiene in Kenya: Lessons on What Drives Demand for Improved Sanitation, Nairobi: WSP.

Jenkins, M. and Sugden, S. (2006) ‘Rethinking sanitation: lessons and innovation for sustainability and success in the new millennium’, Human Development Report Office - Occasional Paper, New York: UNDP.

Mbéguéré, M., Gning, J., Dodane, P. and Koné, D. (2010) ‘Socio-economic profile and profitability of faecal sludge emptying companies’, Resources, Conservation and Recycling 54: 1288-95 <http://dx.doi.org/10.1016/j.resconrec.2010.04.008≯.

Mikhael, G. (2011) Assessment of Faecal Sludge Emptying Services in Freetown, Sierra Leone, Freetown: GOAL.

Ministry of Urban Development (2008) National Urban Sanitation Policy, New Delhi: Government of India.

Prüss-Üstün, A., Bos, R., Gore, F. and Bartram, J. (2008) Safer Water, Better Heath: Costs, Benefits and Sustainability of Interventions to Protect and Promote Health, Geneva: WHO.

pS-Eau and MDP (2003) Enterprises Providing Mechanical Emptying of On-site Sanitation Systems in Major African Cities, Chateauneuf de Gadagne, France: Programme Solidarité Eau and Municipal Development Partnership.

Sandec (2006) Urban Excreta Management - Situation, Challenges and Promising Solutions, Dakar: Sandec.

Trémolet, S. (2012) Small-scale Finance for Water and Sanitation, Stockholm: European Union Water Initiative and SHARE.

Trémolet, S. and Binder, D. (2013) Evaluating the Effectiveness of Public Finance for Household Sanitation in Dar es Salaam, Tanzania, London: WaterAid <www.wateraid.org/~/media/Publications/Dar-es-Salaam-sanitation-report.ashx≯. www.wateraid.org/~/media/Publications/Dar-es-Salaam-sanitation-report.ashx

Trémolet, S. and Evans, B. (2010) OBA Working Paper Series (Paper No. 10): Output-Based Aid for Sustainable Sanitation, Washington, DC: The Global Partnership on Output-Based Aid.

Trémolet, S. and Kumar, R. (2013) Evaluating the Potential of Microfinance for Sanitation in India, London: SHARE.

Waddington, H., Snilstveit, B., White, H. and Fewtrell, L. (2009) Water, Sanitation and Hygiene Intervention to Combat Childhood Diarrhea in Developing Countries, New Delhi: International Initiative for Impact Evaluation.

WHO (World Health Organization) (2008) The Global Burden of Disease: 2004 Update, Geneva: WHO.

AECOM and Sandec (2010) A Rapid Assessment of Septage Management in Asia, Bangkok: United States Agency for International Development.

AMCOW/WSP (2011) Pathways to Progress - Transitioning to Country-Led Service Delivery Pathways to Meet Africa's Water Supply and Sanitation Targets, Washington, DC: World Bank/Water and Sanitation Programme.

Asano, T. (2002) ‘Water from (waste)water - the dependable water resource’, Water Science and Technology 45(8): 23-33 <www.ncbi.nlm.nih.gov/pubmed/12019829≯. www.ncbi.nlm.nih.gov/pubmed/12019829

Banerjee, S. and Morella, E. (2011) Africa's Water and Sanitation Infrastructure: Access, Affordability, and Alternatives, Washington, DC: World Bank.

BPD (Building Partnerships for Development) (2008) Sanitation Partnerships: Dar es Salaam Case Study, London: BPD.

Diener, S., Zurbrügg, C. and Tockner, K. (2009) ‘Conversion of organic material by black soldier fly larvae establishing optimal feeding rates’, Waste Manag Res 27: 603-10 <http://dx.doi.org/10.1177/0734242X09103838≯.

Eales, K. (2005) Bringing Pit Emptying Out of the Darkness: A Comparison of Approaches in Durban, South Africa, and Kibera, Kenya, London: BPD.

Ecopsis (2011) Roll-Out Evaluation of ‘Community Led Total Sanitation’ in West and Central Africa, Geneva: UNICEF WCARO.

Esrey, S. (1996) ‘Water, waste, and well-being: a multicountry study’, American Journal of Epidemiology 143 (6): 608-23 <www.ncbi.nlm.nih.gov/pubmed/8610678≯. www.ncbi.nlm.nih.gov/pubmed/8610678

Hutton, G. (2012) Global Costs and Benefits of Drinking-water Supply and Sanitation Interventions to Reach the MDG Target and Universal Coverage, Geneva: World Health Organization.

Hutton, G., Haller, L. and Bartram, J. (2007) Economic and Health Effects of Increasing Coverage of Low Cost Household Drinking Water Supply and Sanitation Interventions, Background Document to the ‘Human Development Report 2006’ UNDP 2007, Geneva: WHO.

Jackson, B. (2004) Sanitation and Hygiene in Kenya: Lessons on What Drives Demand for Improved Sanitation, Nairobi: WSP.

Jenkins, M. and Sugden, S. (2006) ‘Rethinking sanitation: lessons and innovation for sustainability and success in the new millennium’, Human Development Report Office - Occasional Paper, New York: UNDP.

Mbéguéré, M., Gning, J., Dodane, P. and Koné, D. (2010) ‘Socio-economic profile and profitability of faecal sludge emptying companies’, Resources, Conservation and Recycling 54: 1288-95 <http://dx.doi.org/10.1016/j.resconrec.2010.04.008≯.

Mikhael, G. (2011) Assessment of Faecal Sludge Emptying Services in Freetown, Sierra Leone, Freetown: GOAL.

Ministry of Urban Development (2008) National Urban Sanitation Policy, New Delhi: Government of India.

Prüss-Üstün, A., Bos, R., Gore, F. and Bartram, J. (2008) Safer Water, Better Heath: Costs, Benefits and Sustainability of Interventions to Protect and Promote Health, Geneva: WHO.

pS-Eau and MDP (2003) Enterprises Providing Mechanical Emptying of On-site Sanitation Systems in Major African Cities, Chateauneuf de Gadagne, France: Programme Solidarité Eau and Municipal Development Partnership.

Sandec (2006) Urban Excreta Management - Situation, Challenges and Promising Solutions, Dakar: Sandec.

Trémolet, S. (2012) Small-scale Finance for Water and Sanitation, Stockholm: European Union Water Initiative and SHARE.

Trémolet, S. and Binder, D. (2013) Evaluating the Effectiveness of Public Finance for Household Sanitation in Dar es Salaam, Tanzania, London: WaterAid <www.wateraid.org/~/media/Publications/Dar-es-Salaam-sanitation-report.ashx≯. www.wateraid.org/~/media/Publications/Dar-es-Salaam-sanitation-report.ashx

Trémolet, S. and Evans, B. (2010) OBA Working Paper Series (Paper No. 10): Output-Based Aid for Sustainable Sanitation, Washington, DC: The Global Partnership on Output-Based Aid.

Trémolet, S. and Kumar, R. (2013) Evaluating the Potential of Microfinance for Sanitation in India, London: SHARE.

Waddington, H., Snilstveit, B., White, H. and Fewtrell, L. (2009) Water, Sanitation and Hygiene Intervention to Combat Childhood Diarrhea in Developing Countries, New Delhi: International Initiative for Impact Evaluation.

WHO (World Health Organization) (2008) The Global Burden of Disease: 2004 Update, Geneva: WHO.

AECOM and Sandec (2010) A Rapid Assessment of Septage Management in Asia, Bangkok: United States Agency for International Development.

AMCOW/WSP (2011) Pathways to Progress - Transitioning to Country-Led Service Delivery Pathways to Meet Africa's Water Supply and Sanitation Targets, Washington, DC: World Bank/Water and Sanitation Programme.

Asano, T. (2002) ‘Water from (waste)water - the dependable water resource’, Water Science and Technology 45(8): 23-33 <www.ncbi.nlm.nih.gov/pubmed/12019829≯. www.ncbi.nlm.nih.gov/pubmed/12019829

Banerjee, S. and Morella, E. (2011) Africa's Water and Sanitation Infrastructure: Access, Affordability, and Alternatives, Washington, DC: World Bank.

BPD (Building Partnerships for Development) (2008) Sanitation Partnerships: Dar es Salaam Case Study, London: BPD.

Diener, S., Zurbrügg, C. and Tockner, K. (2009) ‘Conversion of organic material by black soldier fly larvae establishing optimal feeding rates’, Waste Manag Res 27: 603-10 <http://dx.doi.org/10.1177/0734242X09103838≯.

Eales, K. (2005) Bringing Pit Emptying Out of the Darkness: A Comparison of Approaches in Durban, South Africa, and Kibera, Kenya, London: BPD.

Ecopsis (2011) Roll-Out Evaluation of ‘Community Led Total Sanitation’ in West and Central Africa, Geneva: UNICEF WCARO.

Esrey, S. (1996) ‘Water, waste, and well-being: a multicountry study’, American Journal of Epidemiology 143 (6): 608-23 <www.ncbi.nlm.nih.gov/pubmed/8610678≯. www.ncbi.nlm.nih.gov/pubmed/8610678

Hutton, G. (2012) Global Costs and Benefits of Drinking-water Supply and Sanitation Interventions to Reach the MDG Target and Universal Coverage, Geneva: World Health Organization.

Hutton, G., Haller, L. and Bartram, J. (2007) Economic and Health Effects of Increasing Coverage of Low Cost Household Drinking Water Supply and Sanitation Interventions, Background Document to the ‘Human Development Report 2006’ UNDP 2007, Geneva: WHO.

Jackson, B. (2004) Sanitation and Hygiene in Kenya: Lessons on What Drives Demand for Improved Sanitation, Nairobi: WSP.

Jenkins, M. and Sugden, S. (2006) ‘Rethinking sanitation: lessons and innovation for sustainability and success in the new millennium’, Human Development Report Office - Occasional Paper, New York: UNDP.

Mbéguéré, M., Gning, J., Dodane, P. and Koné, D. (2010) ‘Socio-economic profile and profitability of faecal sludge emptying companies’, Resources, Conservation and Recycling 54: 1288-95 <http://dx.doi.org/10.1016/j.resconrec.2010.04.008≯.

Mikhael, G. (2011) Assessment of Faecal Sludge Emptying Services in Freetown, Sierra Leone, Freetown: GOAL.

Ministry of Urban Development (2008) National Urban Sanitation Policy, New Delhi: Government of India.

Prüss-Üstün, A., Bos, R., Gore, F. and Bartram, J. (2008) Safer Water, Better Heath: Costs, Benefits and Sustainability of Interventions to Protect and Promote Health, Geneva: WHO.

pS-Eau and MDP (2003) Enterprises Providing Mechanical Emptying of On-site Sanitation Systems in Major African Cities, Chateauneuf de Gadagne, France: Programme Solidarité Eau and Municipal Development Partnership.

Sandec (2006) Urban Excreta Management - Situation, Challenges and Promising Solutions, Dakar: Sandec.

Trémolet, S. (2012) Small-scale Finance for Water and Sanitation, Stockholm: European Union Water Initiative and SHARE.

Trémolet, S. and Binder, D. (2013) Evaluating the Effectiveness of Public Finance for Household Sanitation in Dar es Salaam, Tanzania, London: WaterAid <www.wateraid.org/~/media/Publications/Dar-es-Salaam-sanitation-report.ashx≯. www.wateraid.org/~/media/Publications/Dar-es-Salaam-sanitation-report.ashx

Trémolet, S. and Evans, B. (2010) OBA Working Paper Series (Paper No. 10): Output-Based Aid for Sustainable Sanitation, Washington, DC: The Global Partnership on Output-Based Aid.

Trémolet, S. and Kumar, R. (2013) Evaluating the Potential of Microfinance for Sanitation in India, London: SHARE.

Waddington, H., Snilstveit, B., White, H. and Fewtrell, L. (2009) Water, Sanitation and Hygiene Intervention to Combat Childhood Diarrhea in Developing Countries, New Delhi: International Initiative for Impact Evaluation.

WHO (World Health Organization) (2008) The Global Burden of Disease: 2004 Update, Geneva: WHO.