Financial incentives for sanitation take-up: A randomized control trial in rural Vietnam

This study assesses the impact of financial incentives on hygienic latrine ownership by poor/near-poor households in Vietnam. Rural communes were randomly assigned to a control group and three treatment arm groups: (T1) a rebate for households that installed a hygienic latrine; (T2) a financial reward for commune governments if the proportion of hygienic latrines in their commune increased by 30 percentage points; (T3) both a household rebate and a commune reward. We find a strong and positive effect from the household rebate (treatment arms 1 and 3) but an insignificant effect from the commune reward (treatment arm 2) on household ownership of a septic tank latrine. Our analysis provides suggestive evidence that microcredit is a channel through which a rebate encourages the installation of septic tank latrines. We also find that treatment arm 3 increases people's knowledge regarding sanitation and the availability of water and soap for handwashing within households.