Public Finance at National Level

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Re: Public Finance at National Level

Hi

I've not had a chance to read in detail but related to this discussion is this WaterAid report... "Achieving total sanitation and hygiene coverage within a generation lessons from East Asia"
www.susana.org/en/resources/library/details/2453

which was also disseminated as the more catchy title "How did E. Asian Tigers Provide Sanitation Access So Quickly ?" see whconference.unc.edu/files/2014/10/brewer.pdf and
programme.worldwaterweek.org/event/how-did-asian-3935

This was considered to be newsworthy and reached the media - see
articles.economictimes.indiatimes.com/20...household-sanitation

It would be good to hear from WaterAid at this point.

regards

Jonathan
Dr. Jonathan Parkinson
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IMC Worldwide Ltd, Redhill, United Kingdom
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  • Florian
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Re: Public Finance at National Level

Great discussion! Thanks so much for initiating this!

I'd like to give some unsystematic thoughts, starting with quoting Jonathan:

I perceive that money is available in national coffers of all but the most impoverished countries. What is required is a substantial increase in the allocation into sanitation for a fixed period of time (say 5 years) to enable a national sanitation programme to have the resources for some major investments.


I also believe that raising funding is the less difficult part, more difficult is to get sufficient funds allocated for sanitation, and even more difficult it is to spend the funds in the right way.

What makes sanitation so challenging is that it goes beyond the public domain into the private, as it has been mentionned by several contributers already.

For urban (piped) water supply or sewered sanitation, things are relativiely easy. The public responsibility is everything what takes place outside the plots of the people, big infrastructre is needed, and investments are done through municiapl utilities or municipal construction departments.

When the problems are on the plots and inside the houses of people because people don't have proper toilets - and this is what we are taking about here I think - it gets much more complicated. A common approach so far has been just to do the same as with water supply or sewerage: funding infrastrucure projects, e.g. latrine building programmes. This hasn't worked very well, as the briefing note in the first post also says. It doesn't work, because the individual situation, knowledge, abilities, needs and priorites of the people can't be addressed properly within building programmes executed by engineers and construction contractors.

To achieve change on the people's plots, inside their houses, and most importantly, inside their heads, different approaches are needed. Approaches like CLTS, health and hygiene education, smart subsidises, creating good conditions for small sanitation business, building up supply chains, etc. etc. Water and sanitation utilties or municipal construction departments are not the right institutions do do these things. Health and hygiene education should be done through the health system and schools, subsidises should best be provided by the social affairs offices, supporting private business is the job of the economic departments and so on.

So when we say "more money should be allocated to sanitation" it is not as simple as allocating money to water supply or sewerage, where all the money can be channeled through one institution, which then does what it knows to do: construction projects. Allocating money to sanitation means better funding of a amultitude of institutions, who then all should run programmes with new approaches, and all this of course needs to be well coordinated and montitored.

This is extremly difficult, and this is why it isn't happening, and this is why so little public money is invested in sanitation. I guess.

Florian

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  • Sowmya
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Re: Public Finance at National Level

Dear All,

What a wonderful discussion :cheer: :cheer: :cheer: :cheer: and my apologies for the delay in participation. I would like to address the third question (Catarina’s post #13803 dated 23 Jun 2015):

How to successfully advocate for improved tracking and monitoring of government expenditure for sanitation beyond the community and the district level? Does anyone have good examples of what has worked or not and why?

[Please note: I am abbreviating “tracking and monitoring” as “T&M” for the purpose of this post. This is not a technical jargon but the phrase is so apt that I just wanted to keep it but with the abbreviation for reading convenience.]

I think this is a very important question from SDG achievement perspective. One of the most famous maxims in management is “If you can’t measure it, you can’t manage it”.

Does anyone have good examples of what has worked or not and why? T&M in health sector.

I wonder if it is possible to gain inputs from other sectors, apart from good examples from within the sanitation sector. Some highlights of T&M in the health sector:
  1. A compendium of indicators that is extensive and also enables harmonization of terms across all data collection efforts (international, national, institutional, independent research, et al);
  2. The indicators cover several aspects required beyond the SDG target indicators – for instance, financing (% of GDP spent & out-of-pocket expenses), human resources (no of doctors/nurses for 1000 population), adequacy of service centers (no of hospitals per 100000 population), data collection systems (birth registration coverage), affordability & availability (median availability of selected generic medicines, median consumer price ratio of selected medicines), health outcomes (life expectancy);
  3. Wide-range, comprehensive databases & decision tools available online: For instance, health accounts , global health expenditure database (GHED), OneHealth Tool ( www.who.int/choice/onehealthtool/en/ ) is a software tool designed to inform national strategic health planning in low and middle income countries, WHO-CHOICE provides evidence on interventions and cost-effectiveness, global price tags, GeoAccess supports the use of Geographical Information Systems (GIS) to analyze physical accessibility and linking results to national planning and costing processes, estimates of economic burden of disease ;
  4. A lead organization for providing technical inputs, coordinating efforts across countries, etc to build and strengthen the health T&M system across the globe.
It would be great to have further discussion regarding the following: Why is T&M in health sector a good example (further insights)? What are other highlights of health sector T&M? What are its capabilities (ie., what does health sector T&M enable stakeholders to do). Insights about “what has worked and why” from health sector.

Is it possible to invite someone from health sector to give inputs on the above? Could we also post a message on HIFA2015 to find out views of health professionals (what is their satisfaction level with current T&M in health sector, what has been their experience in setting up the T&M system)? In turn (if possible), a discussion on what we can learn for each of the sectors.

Strengthening T&M in sanitation – rationale:

Sanitation technologies differ in their impact on human health, ecology and the environment. While human health has already been prioritized in decision making, acceleration in mainstreaming ecology & environment is to be expected after the UNFCC is recognized as the lead organization for climate change matters (SDG goal 13). From a development & policy-making perspective, therefore, interventions will be assessed in future based on health, ecology and environment instead of mainly health. In concrete terms, sanitation has linkages with 10 SDG goals. Given the above, a strong T&M is a critical necessity to achieve sanitation and other SDG goals. Some additional thoughts in this regard:
  1. There is mostly a one-directional impact between health and other sectors (ie., while activities in other sectors can impact health outcomes, health interventions do not directly impact outcomes in other sectors). However, sanitation has significant impact on both technology choices and outcomes in other sectors. For instance, waste recovery in sanitation can increase the availability of decentralized energy generation technologies (cooking gas) or organic fertilizer (impacting energy and agriculture) as well as outcomes for gender, ecology and environment. Yet, the number of dimensions T&M’ed in sanitation is abysmally few compared to what has been achieved in the health sector. The same can be said of databases and decision tools available as well. Given the above context, two points to be considered are: (a) Should we intensify efforts for a strong T&M system in sanitation, and (b) (this is for my own knowledge) answer to this question: Health sector has strong T&M; what about other sectors? Is sanitation an exception or the rule in not having strong T&M?
  2. Sanitation infrastructure created on the ground may not always result in equal units of outcomes for health and ecology/environment. There might be (a) health-environment trade-offs (for instance, sewer systems without sewage treatment plants) or (b) lesser health/environment benefits realized compared to other technologies (sub-optimalities). Therefore, a strong T&M system is essential for determining SDG outcomes actually realized on the ground.
Thanks and warm regards,

Sowmya
Sowmya Rajasekaran
Director
Verity SmartLife Solutions
www.veritysmartlife.com
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  • cecile
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Re: Public Finance at National Level

Hi everyone,

This discussion is entitled "Urban sanitation finance". Why this specific focus on urban sanitation?
From the exchanges we can see very well that the need for sanitation financing is high both in urban and in rural areas.
Could you explain in more details the choice for this urban focus?

Here in Egypt, rural areas have been neglected so there is a need for sanitation infrastructure financing in rural areas at least as much important, if not more urging than in urban areas. There is also a need for sanitation institutions financing, training and capacity building because there are not existing organizations in rural areas who have the capacity or the legitimacy or the willingness to manage infrastructure and to manage users.

One question came back several time which is summarised in one of the posts as if "national investment in sanitation becomes the norm yes but investment in what ? “

From what I can see (in Indonesia and Egypt), there is sometimes a lot of money allocated to sanitation infrastructures by donors and by governments. It is becoming more the norm for donors and governments to invest in sanitation infrastructure in urban areas (WWTP). It is less appealing to governments to invest in individual sanitation. This is often a choice that is financially unwise, in areas with space because of the high cost of centralised infrastructure compared to individual or small collective infrastructures.
Gradually there is more money allocated in technical assistance projects to what is called "accompanying measures", i.e. community, financial and institutional aspects. The expression “accompanying measures” speaks by itself and the balance gives a lot of importance to the infrastructure and comparatively a smaller importance to financial management, governance, training of human resources amongst others. There is a need of more public investment in these components, and not only within the frame of projects.

From what I can see there is a need to invest public money:
- In capacity building on topics such as financial management (this exists at project level, with workshops being conducted but this is not enough, it should be part of national curricula), accountability and utility management in general.
-In institutional building to manage both the operational aspects but also the governance of the systems.
This need for public spending would be beneficial at national level but also in rural areas where there is an existing gap. In several projects aiming at providing sanitation in rural areas there is a need for investment to create organisations to operate, maintain and manage the infrastructure which means to determine the tariffs, to set up cross subsidies, to collect door to door, to put money aside etc. Because of this gap, rural projects run by NGOs or consulting companies have to create CBOs (Community Based Organisations) or WASH committees to ensure this function with very little means when we know that these organizations, with little experience, will determine the quality of the service provided and the operational life of the infrastructure built. How can we expect a newly created organisation will ensure proper reuse or discharge of treated sludge when the human resources knew nothing about the subject a couple of months before?

One last point about monitoring and evaluation: I have always seen very good monitoring of disbursements in projects. Some donors even call “disbursement” “evaluation”. I think the real M&E would consist in tracking the level of sanitation (on a new revamped ladder !) every 2 years or so, in order to make sure the initial investments are still operational and serving the users, and in order to take corrective measures to optimize these investments. So it would not only tracking the public spending but also the impact in terms of where did this expenditure bring the country or the region on the sanitation ladder.
Cécile Laborderie
MAKATI Environnement
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  • Katrin
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Re: Public Finance at National Level

Dear all,

Thank you for these great contributions so far!

As you know, we have another discussion thread on “Public Finance at Local Level” hosted by Guy Norman, which you can access here .

While urban sanitation at the local and national level might be discussed separately here, they are not as separable in the “real world” and so I would be interested in whether you have experience with “coordinating” funding originating from different levels of taxation.

In this regard, I would like to highlight Esther’s experiences (post #13880, see forum.susana.org/forum/categories/190-th...national-level#13880 ) from the Philippines. She writes:

“Regarding public funding for sanitation after the typhoon there was a large NGO presence in one of the poorer areas of the Philippines which has had a huge impact on policy and government. The Philippines has legislation in place that prioritises water and sanitation interventions at various, levels this was in place before the typhoon but not really adhered to. Due to the decentralised systems ultimate responsibility lies with the regional and municipal level authorities. However there are a number of funding opportunities from different government bodies like the Department for Social Welfare and Development and the Department of Health, which can be accessed to supplement the regional budgets. These can be challenging to utilise and many of the NGOs are supporting the municipalities to make the most of these opportunities but they do seem to offer motivation to prioritise sanitation at a certain level.”


Has anyone else been involved in navigating different levels of government for funding opportunities? What were your experiences? Esther’s post seems to suggest that funding from the national level is a more complex procedure with which municipalities are struggling and for that reason start to neglect as a source of funding. Did I understand that correctly?

Best,
Katrin
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  • catarinafonseca
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Re: Public Finance at National Level

Dear all,
I’ll try to address some of the questions and comments succinctly.

1. What is understood by “urban” in “urban sanitation finance”? Why urban?

Going back to the brief that is the background to the post: urban means densely populated areas and urban sanitation means the whole system from safe containment, collection, transport - to treatment and safe disposal or reuse of human waste. So yes, it includes small towns, it includes peri-urban areas, it includes slums within urban centres. And it is so much more than financing the technologies, but also the institutions public and private that need to be in place to provide a sanitation service – not a toilet.

Why urban? Because the discussion on rural financing sanitation it's a whole discussion in itself, quite different from the urban and we were asked to focus ;) Maybe the topic of another thread in the future?

2. What countries does this thematic discussion focus on? Can developed and developing countries really be compared, i.e. can the former serve as “best practice examples for the latter?

This is focused on all the countries which are facing problems in urban sanitation financing: low income countries, middle and high income countries. Sometimes I feel we in the WASH development sector are reinventing the wheel when there is so much to learn from our own countries. How did Germany finance urban sanitation? I’m being quite general about it, but in a nutshell: The Marshall Plan and massive debt relief. Which means it was funded by international transfers for getting a decent level of service and then taxation to keep it going. Jonathan points to a recent WaterAid report “In Singapore, the widespread extension of access to household sanitation happened through a large government-subsidised low-income housing programme.”

3. Is looking into other sectors (e.g. the health sector) helpful in improving tracking and monitoring concerning sanitation?

Yes, this is also useful. This is what the TrackFin Initiative from JMP/WHO is attempting to do. But there is little we can track at international level if the countries themselves are not collecting the data. Sophie Trémolet who will be leading the final thread on this discussion can give some more examples on what has been useful in the health sector that we can learn from.

4. How to address the Catch 22 of public sanitation finance: “users will only pay for a system that works”?


Also correct – therefore financing mechanisms need to take into account that the first year or two require investments that will start being paid later. This is the same situation with water utilities in urban areas. First services need to be improved, then some recovery of costs can be expected. This is the reason why it’s hard to attract private finance for large investments in urban sanitation: not fast enough recovery rate on loans through payments of tariffs.

5. Raising funds is the less difficult part, how to utilise the funds is the question

It’s both. For urban sanitation services and the scale of investments that are needed, in my experience, raising funds is a very difficult aspect of service delivery. Evidence? For private finance you can glance trough ADB and AfDB reports and see lack of loans for urban sanitation. For public finance you can check the data we have put together in the brief.

6. It is not a money problem – it is willingness in the change of perception of providers and donors.


Its also both! I quite like that Esther says that “political cycles have an increasingly large impact on sanitation as well as other infrastructure” because that means that these are opportunities that can be used by civil society organisations to call for transparency of existing funds and more appropriate budgets for urban sanitation. If change needs to happen – then it needs to be triggered, with evidence and with engagement.

Some of the other examples and posts and discussions on financing municipal governments are great contributions to bridge the discussion from this thread on national level to the other discussion thread on “Public Finance at Local Level” hosted by Guy Norman: ( forum.susana.org/forum/categories/190-th...ion-what-a-crap-idea ).

Kind regards,
Catarina
Catarina Fonseca
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  • HAPitot
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Re: Public Finance at National Level

Dear Catarina, dear other contributors,

thank you for the clarifications, and thank you for your very interesting contributions. I will have to challenge you:

Catarina: some decades ago, when my parents were constructing a house in Germany, there was talk of "Anschlusskosten", i.e. a hefty amount for connection costs for water, sewers, roads, electricity, gas. I think it was in the order of 10 000 DM, now this should be at least 10 000 Euro. So, in Germany, the state may have advanced the costs of investment into water supply and sewerage infrastructure, but the house owners are supposed to pay the money back. To what extent this is actually happening in a cost covering way, I don't know, but I think this is the way it is supposed to be.

As a person who hates to pay taxes, and prefers to believe the state is grabbing too much, I like the idea of 'Anschlusskosten'. Let the people themselves pay for connections if they can, and before my hard earned tax money is being used! What government needs to do is to organize the planning in a professional way, organize the finances (and financing), which in itself are huge challenges for developing countries, and in itself could be considered 'subsidies', but leave to the house owners what they can pay!

Thanks,

Hanns-André
Hanns-Andre Pitot
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  • catarinafonseca
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Re: Public Finance at National Level

I like challenges Hanns-André ;)

When your parents decided to build a house it looks like it was not in a dense urban area (you still needed to contribute for roads, electricity, etc). Additionally, a few decades ago Germany had a GDP much higher than any of the low or middle income countries have at the moment and inequality rate was(and it still is) not as shocking as in many South Asia and Sub-Saharan African countries - which means that a few decades ago people in Germany could indeed pay for some infrastructure costs and maintenance and they did not need redistributive taxation (because inequalities are not very high).

What do you think is the proportion of households in low and middle income countries that can pay for a full sanitation service?

My point is: up to a basic level of sanitation service, and especially for the vast poor majority, you will always need public finance - and the main source is taxation. The government is the ultimate responsible for providing water and sanitation services - its the duty bearer as enshrined in the Human Rights to Water and Sanitation. In the absence of formal service providers who can actually charge tariffs (and therefore getting people to pay for sanitation services), the only way to finance large sanitation infrastructure and the institutions that go with it is using public finance and taxes.

I fully agree with your last point that planning and finances need to be done professionally which means that capacity building of government officials at city level for sanitation also needs to take place. Would you want your parents to pay for that too?

Kind regards
Catarina
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Re: Public Finance at National Level

A few quick thoughts:

First, it is important to realize that the actual expenditure for urban sanitation takes place at the local government level. Even in countries that have water utilities, sanitation is often with local governments. In this context, it is important to have adequate capacity of local governments to utilize funds and implement projects as well as ensure proper O&M later. Urban local governments also have their own funds and the question is how to incentivize them to allocate and utilize the funds for sanitation. So beyond national allocation these are important issues.

Second, as urban sanitation is a local service (in most countries – through there are a few exceptions such as Senegal and Malaysia) the public finance has to be viewed, analyzed and assessed with a fiscal decentralization perspective. A specific country’s policy on this comes into play in assessing sanitation finance. The predictability of funding and local autonomy are important features of good decentralization. So again focus on influencing sanitation funding is equally at the local level. Our reports for two Indian states look at some of these issues (Gujarat - Maharashtra -attached)

National government can of course play an important role through programmatic funding for sanitation. Our experience in India has been to have urban programs with wider urban development concerns in the past. Even when there is a sanitation focus as in the recent Swachh Bharat (Clean India) Mission, it includes besides household sanitation a focus on Solid waste management services. Our ongoing work with two cities in India also includes introducing integrated faecal sludge management services.

National and state governments can also use performance based grants but the importance of building local capacity and putting greater trusty in these institutions is critical as we discuss in a recent perspective paper on a trust based approach towards local governments in Ideas for India

Third, there has to be discussion about using public funding to leverage additional funding in the sector. This not only helps to bring in addition funds but helps introduce greater accountability and help improve effectiveness of finance. See for example some discussion on this in a recent column on Financing Sanitation in Ideas for India.

Finally, (in this round) a parallel focus is needed on linking funding with monitoring of outcomes. Under the PAS Project at CEPT University in Ahmedabad, India we have set up performance assessment systems in three states in India with perf information now available for 5 years across 450+ cities. The results can be viewed interactively for state and city levels. Comparison with other cities is also possible. This system uses standardized service performance indicators agreed at the national level. Such systems will be need to be introduced in country’s own monitoring systems and linked to financial tracking as being attempted through Trackfin.

More later..

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  • HAPitot
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Re: Public Finance at National Level

Dear Catarina:

Thank you for your detailed response! Concerning your first question

What do you think is the proportion of households in low and middle income countries that can pay for a full sanitation service?

I think I have made my opinion quite clear in the local taxation section. I think a lot can happen at the local level, and I would agree with Meera that most of the financing of sanitation initiatives can be at that level. Where central government can help would be with issuing of government bonds for (pre)financing of large projects, but in sanitation, projects are preferably small in scale.

Greetings, H-A
Hanns-Andre Pitot
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  • jonpar
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Re: Public Finance at National Level

Dear All,

In response to the question on tracking and monitoring of government expenditure for sanitation, I think GLAAS ( www.who.int/water_sanitation_health/glaas/en ) is probably the most developed and widely applied approach.
apps.who.int/iris/bitstream/10665/75225/...SE_WSH_12.05_eng.pdf

I also came across this www.governmentspendingwatch.org/ but sanitation and water are lumped together.

The report by Marie-Alix Prat and Sophie Trémolet that is available from
www.shareresearch.org/localresources/not...to_sit_june_2013.pdf
looks very relevant. It would be get their input to the discussion on this so we can learn from their experience and insight.

But it would also be really good to hear from more people about their views of the issues that are being discussed. I therefore encourage those who have not yet submitted to the discussion to do so within the next couple of days.

best regards,

Jonathan
Dr. Jonathan Parkinson
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  • Katrin
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Re: Public Finance at National Level

Dear all,

Thank you for sharing your experiences and raising questions on this discussion thread so far.

This is just a short notice that the official part of this discussion will end tomorrow. What this means is that contributions published by tomorrow evening will be included in the summary of this discussion which will be published next week (further information to follow).

You will of course be able to continue the conversation after that point. However, if you would like your ideas and thoughts to be included in the official summary of our discussion, NOW is the time to hit the reply button! :)

- Katrin
Dr. Katrin Dauenhauer
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