Sanitation, financial incentives and health spillovers: A cluster randomised trial

Poor sanitation and its consequent negative health outcomes continue to plague the developing world. Drawing on the finding that financial subsidies have changed behaviour in other health contexts, we conducted a clustered randomised trial in 160 villages in Lao PDR to evaluate the effectiveness of combining financial incentives with Community-Led Total Sanitation (CLTS), a widely-conducted behaviour change program. Villages were randomly allocated to four groups, all of which received CLTS but differed in the type of subsidy offered (none, household, village or both). Using data from a random sample of households with young children and village administrative data, we show that household incentives increased sanitation take-up among the poor, whereas a village incentive increased take-up primarily among the non-poor. Improved sanitation produced positive health spillovers - a 10 percentage point increase in village sanitation coverage decreased the probability of childhood stunting by 3 percentage points.