The demand for water in rural areas: determinants and policy implications

Improving the adequacy and quality of water supplies is a priority for rural development in developing countries. So far, the strategies of governments and international donors for tackling the problem have been supply-driven; the fundamental importance of demand in the selection of appropriate policies has been virtually ignored. The realization that effective policy and planning must take into account what the rural clients want and are prepared to pay for was the impetus for the World Bank's multicountry study of households' demand for improved water services. This article summarizes the findings of the 1987-90 investigation of determinants of rural demand in selected regions of Latin America, Africa, and South Asia. The research team used both direct (contingent valuation) surveys and indirect (revealed preference) methods to estimate households willingness to pay for different levels and types of improvement. The methodology produced some illuminating insights into how to decide what level of service is appropriate for a particular community and how the improved services should be paid for. The team identified 4 broad categories of village situations, with appropriate policies ranging from the provision of house connections at full cost of one extreme, to no improvement in traditional supplies at the other extreme.