ASi" kUCTURE FlOR DEVELOPMENT

way of achieving distributional objectives. Such to govermnent Environmental sustainability inschemes
work because they mobilize large transfers volves innovation in tecnology and organization,
rapidly, and,.by offering relatively low wages in re- as well as improved efficiency in the use of infratum
for unskilled manual labor, they transfer in- structure services through pricing and regulation.
come only to those.without more attractive options. Regulatory efforts are also necessary for infrastruc-
In India's Maharashtra state, the Employment Guar- ture services to be delivered in compliance with
antee Scheme, initiated in response to the severe public safety standards.
drought in 1972-73, provides unskilled rural employment
on demand. The scheme has provided al- Innovatioii in design for affordability
most 1.7 billion person-days of employment and. is
credited with playing a large part in averting Worldwide, roughly 1 billion people lack access to
calamity during numerous droughts. However, lit- clean water and more than 1.7 billion do not have
tie evidence exists that such schemes produce- the adequate sanitation. Diarrheal disease, often caused
most economially use infiastructure. Coordinat- by contaminated water, represets one-sicth of the
ing them with overall infrastructure priorities might world's burden of disease (World Development Report
strengthen their economic impact
1993). The most widespread contaminant of water is
disease-bearing human wastes. The environmental
Addressing extemalities
benefits of water supply depend not only on delivering
safe water for drirding but also on providing
Infrastructure often has widespread indirect im- enough water to permit good human hygiene.
pacts-frequently, on the environment-which can Equally important is reducing contact with human
be beneficial or hamfuL Irrigation nrastructure exaeta by providing pit latrines, toilets, and sewers
can reduce pressure on land resources by permitting (Box 4.5).
greater intensity of cultivation on existing plots, but Although even among the poor the willingness
it can also promote excessive water usage, resulting to pay for water is often sufficient to cover costs, this
m groundwater salinzation and land subsidence. is not always so in the case of sewerage, both be-
.- lfifrastructure can also reduce or increase public cause conventional sewerage is often expensive and
safety. Road improvements that raise traffic speed because costs of inadequate sanitation are
may expose nounotorized road users to increased not borne within the household. For limited public
risk of accdents; traffic signals can improve pedes- funding to benefit large numbers, adoption of techtnian
safet. Because markets often fail to refect nicl and organizational innovations in low-cost
these exteralities, their management usually falls sanitation is necessary; A study m Kumasi, Ghana,
-.Bo 4.5 Assessing a reach:water in Kath=mdu
Evaluating inrastructure projects is difficult at best En- niques, benefits from the cits new $50I mlion water
vironmen talcosts must be identified and valued, the - distribution system induded adiectfinancialsavingsof
amountthatindividualswillpayforservicedeermine, - 5500,11 annually from lower mainte costs, plus
- and tie effect thatservce will have on other ninrsuc- substantia annual benefits ased on willingness-to-pay
mtre sectors assessd Water supply, sewage treatment estimates for different userangg from a low of $10
- sanitation, solid and hazardous waste handling. and am- for standpipe users to abigh of $250 for business users).
:bient*water quality are all interelated. A weakness in- Total benefitswereestimatedtobeS19-1 millionperyear.
any one will afact iastructure requiremens else- At a 12 perent discount rate, the project showed a mar-
:whe - ginally positive netbenefitofSS2 million.
'In the Nepalese capital of Kathmandu, officials as- -Using the more detailed service4evel approach to
:esse- d tiheeffets of improving the watservice usmg project appraisl, however, it was determined that in
.,an exitnsion -of traditional costbenefit analysis-the - somecaseshealthbenefitsfromareductionincoliform
-sevic-level"appoach t- valuation This approadchc-- contamination of the water appoached S1,00 per unit
,ognizes that environmental- servies are valued diffe- serviced. An education program that improved water
-ently byl difflnt users and also attempts to asess indi- use led to further reductions in health and transport
- .rect effectsof waterprviso n. costs. After these indiect benefits wer factored in, the.
- CKathniandu has LI millionhihabitants. Based onesti- project showed a positive net benefit of about $275
-':mates usng narrowly:defined project appraisal tedh- million.
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