WG 2 Costs and Economics: Change of the name of the working group

  • philfei
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WG 2 Costs and Economics: Change of the name of the working group

Dear members of the working group 2 and all,

Jonathan (lead of the working group 02) came up with the idea to change the name of the working group from "Cost and Economics" to "Finance and Economics". I think it is a good idea but we should have a discussion among our working group.

@Jonathan: It would be great to explain why you prefer the change of the name.
@All: What do you think about a change of the name?

Cheers,
Philipp

Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH
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  • jkeichholz
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Re: WG 2 Costs and Economics: Change of the name of the working group

+1 for the change because "costs" is already part of economics (isn't it?) and bcs the focus shdnt be on the costs, but on financing options.

Juergen Eichholz
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  • arno
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Re: WG 2 Costs and Economics: Change of the name of the working group

Yes this is a good suggestion from Jonathan. Could be "Economics and Finance" since we tend to put things like cost and economics first.

Arno Rosemarin PhD
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Re: WG 2 Costs and Economics: Change of the name of the working group

Good idea, considering in my country some local governments tend to think just of the “costs” of sanitation (therefore, tariffs), without considering more innovative ways to finance their services.
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  • jonpar
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Re: WG 2 Costs and Economics: Change of the name of the working group

Dear Members of the Specialist Group, I've just logged in and I see that some people have already expressed their support for the proposed change. I don't think I need to write much in the way of explanation as it is clear that people evidently had the same feeling as me that “Cost and Economics” is a bit confusing because there are a) financial costs and economic costs as well as b) financial and economic benefits. So “Cost and Economics” seems to be mixing the two and "Finance and economics" is more logical to me. As has been pointed out it emphasises the need to focus specifically on finance in sanitation. I strongly believe that as a sector we've got to get our act together in this area (cost-effectiveness assessment, financial sustainability, financing mechanisms). There is alot of good work already being done but (correct me if I am wrong) there is along way to go before we see standarized methodologies for financial analysis routinely part of academic training. Obviously there are some courses where students come out with some tools to be able to apply in practice but I fear that this is far from the norm and we still see the majority of engineers with a very poor understanding of financial issues. I speak from experience as I don't feel my education gave me a good base of understanding on this and I still don't consider myself nearly proficient enough in this area. So, I hope that the SuSanA 'Finance and Economics' Working Group (could be Economics and Finance as Arno suggests but I'm happy to stick with 'Finance and Economics', will form the basis of interaction and learning between researchers and practioners that can support a transformation in this area. In pursuit of this goal, I look forward to your active involvement and participation. regards, Jonathan Parkinson - IWA Sanitation Program Co-ordinator.

Dr. Jonathan Parkinson
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Re: WG 2 Costs and Economics: Change of the name of the working group

Dear Jonathan,
Can you please explain a little bit further the name change:
Why in this order and not in the other order, i.e. Economics and finance or the other way round? The more important word should come first.
I am not sure I understand the word "finance" fully here. Is it the same as "financing", i.e. how to finance sanitation?
I am just wondering if each lay person knows what is meant by economics exactly (even for me, I always find this word a bit fuzzy). Whereas the word "costs" is clear to each and every policy maker, politician, engineer etc.
So could the word costs somehow be retained so that we don't lose touch with the people on the ground?

Cheers,
Elisabeth

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  • jonpar
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Re: WG 2 Costs and Economics: Change of the name of the working group

Hi Elisabeth, thanks for the message requesting clarification. I don't have strong feelings about which way round the words should go, but I don't quite agree with you that economics is necessarily more important than the financial dimension. Economic analysis is inherently more complex than financial analysis, but that doesn't mean that it is more important. If we can't get the finance right then sanitations systems will invariably fail and in this respect I would argue that the financial side is just as important as the economic side. The reason for the proposed change is really about the word "cost". As there are many "economic costs" associated with poor sanitation, the use of the words "cost" and "economics" seems tautological (repetition of the same meaning). If we were to change it to "Finance" we would be stressing that we are interested in financial costs and benefits as well as other important aspects related to financing. You may be right about the fact that many people see "cost" to be the primary factor that needs to be considered, but in my mind this is also a strong reason for increase awareness about other aspects. One of the problems with the use of the word "cost" is that it is often synonymous for "capital cost" (overlooking the importance of operation and maintenance cost). I perceive, finance to be much broader, including not only capex/opex but also the instruments that influence financial flows. In my opinionm the SuSanA working group needs to embrace this broader scope, but it would be good to hear from a few more people about whether they support this proposed name change or not. best regards, Jonathan


"Cost " also tends to have a conurtation

Dr. Jonathan Parkinson
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Re: WG 2 Costs and Economics: Change of the name of the working group

This information was received by e-mail on 7 September 2011 from Murugan Gangadharan.
With his kind permission, I am posting it here (posted by philfei):
++++++++


Dear Philipp,
yes it is indeed a nicwe idea to change the subject and elaborate it further rather than limiting in cost alone.

My observations are based on my experience. in many countries Sanitation could not penetrate for several reasons including finance. It is not cost alone that matters, it is something beyond that. People may run short of finance and there should be innovative financing mechanism to achieve better coverage. hence I am of the strong view that it should be renamed.
In some countries it also speaks of not only cost but also financing for sustainability. This should also be considered, it seems to me. More over it has far reaching effects to the common people.
Regards,
Murugan

Regards,
Murugan

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Re: WG 2 Costs and Economics: Change of the name of the working group

Dear Jonathan,
Your last posting was somehow cut off here (?)

"Cost " also tends to have a conurtation


I think I understand better now what the issues are, thanks for clarifying!
So what is the final verdict? Change it to "finance and economics" (or "financing and economics"? Is "finance" a noun?

(I think you also sent an e-mail to the WG 2 mailing list, were there any reactions from the group? If not, then silence = agreement!

Regards,
Elisabeth

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  • jonpar
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Re: WG 2 Costs and Economics: Change of the name of the working group

Dear Elisabeth, thanks for the email. I think the general response has been positive to the suggestion to change the name. I've not see any postings with anyone saying that they strongly oppose - so I think we will accept this on a "no objection" basis. best regards, Jonathan

Dr. Jonathan Parkinson
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  • blume_ste
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Re: WG 2 Costs and Economics: Change of the name of the working group

I guess the name “cost and economics” has some historical reasons. As Jonathan said, there are different sanitation related costs besides broader terms operational and capital expenditures; there are e.g. hardware, software, monitoring and reinvestment costs. In the beginning the working group wanted to clarify and distinguish on the different cost type and therewith avoid that apples are compared with oranges and decision makers plan hardware costs only into their budgets. Further the working group aimed to enrich the weak data base on all those costs. The working group developed a literature review, a simple methodology and a fact sheet then.

However, in the end all those costs have to be financed and I believe that the working group now can contribute if it compiles innovative financing mechanism rather than still focusing on costs of sanitation. Not at least it might be an issue of efficiency as the IRC WASHcost program is doing great work on the cost issue and the WSP Economics of Sanitation Initiative around Guy Hutton develops excellent methodologies/data on the economic part of sanitation.

Bearing in mind that there are many different methodologies for financial and economical benefits/costs and the working group might be willing to bring those methodologies together, I would argue for “finance and economics” (two nouns, as there is no verb for economics, or?). If the working group would exclusively focus on the question how to finance sanitation I would argue for “financing of sanitation”...

Mr. Steffen Blume
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