Controlling water pollution in developing and transition countries--lessons from three successful cases

The policy prescription for solving environmental problems of developing countries and countries-in-transition (CIT) is slowly getting polarized into two viewpoints. One group of researchers and policy advocates including multilateral organizations upholds extensive use of market based instruments (MBIs) in these countries. The other group argues that institutions need to be built first or the policy makers should select the incremental or tiered approach taking into account the existing capabilities. The group also insists that the financial, institutional and political constraints make environmental regulation in these countries more problematic than in industrialized countries. In the short-run, the immediate needs of the developing countries can be addressed effectively by learning lessons from the difficulties encountered by a few successful cases and accordingly evolving an appropriate policy instrument. In this paper an attempt has been made to highlight three such cases from three different parts of the world--Malaysia (Asia-pacific), Poland (Eastern Europe) and Colombia (Latin America). The paper looks into what policy instruments led to a fall in water pollution levels in these countries and what role did MBIs play in this pollution mitigation? The case studies suggest that it is a combination of instruments--license fee, standards, charge and subsidies--reinforced by active enforcement that led to an overall improvement in environment compliance.