ASi" kUCTURE FlOR DEVELOPMENT

way of achieving distributional objectives. Such to governmenL Enviromental sustainability inschemes
work because they mobilize large trnsfers volves innovation in technology 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- Lure services to be delivered in compliance with
antee Scheme, initiated in response to the severe public safety standards.
drought in 1972-73, provides unskiled rural employment
on demand. The scheme has provided at- Innovation 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- dean water and more than 1.7 billion do not have
tle evidence exists that such schemes produce the adequate sanitation. Diarrheal disease, often caused
most economically useful infrastructure. Coordinat- by contaminated water, represents one-sixth 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 envirorunmental
Addressing externalities
benefits of water supply depend not only on delivering
safe water for drinking but also on providing
InfrasLructure often has wvidespread in.direct 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 harmful. Irrigation infrastructure excreta by providing pit latrines, toilets, and sewers
can reduce pressure on land resources by pennitting (Box 45).
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
-in groundwater salinization and land subsidence. is not always so in the case of sewerage, both behifrastructure
can also reduce or increase public cause conventional sewerage is often expensive and
safety. Road improvements that raise traffic speed because certain costs of inadequate sanitation are
may expose nonmotonzed road users to increased not borne within the household. For limited public
risk of accidents; traffic signals can improve pedes- funding to benefit large-numbers, adoption of techtrim
safety. Because markets often fail to reflect nical and organizational innovations in low-cost
these extemalities, their management usually fails sanitation is necessary. A study in Kumasi, Ghana,
Box 4.5 Assessing a project's reach: water in Kathmandu
Evaluating infratructure projects is difficult at bes* En- niques, benefits from the cty's new $150 million water
viromnental costs must be identified and valued, the distribution system induded a dirct financial savings of
amount that individuals will pay for service determined, $500S,00( annually from lower maintenance costs, plus
and he -effect that service wil have on other infrastruc- substantial annual benefits (based on willingness-to-pay
Wr sectors assessed. Water supply, sewage treatment,. estimates for different users ranging from a low of $10
sanitation,solid and hazardous waste handling and am- for standpipe users to a high of $250 for business users).
bient water quality are all interrelated. A weaknmess in Tot benefits were estimated to be $19.1 million per year
any one will affect infrastructure requirements else- At a 12 percent discount rate, the pxriect showed a mtarwhere.
ginally positive net benefit of $52 million.
In the Nepalese tapital of Iathmandu, officals as- Using the more detailed service-lever approach to
sessed the effects of improving the water service using project appraisal, however, it was deternined that in
an extension of traditional cost-benefit analysis-the some cases health benefits fxom a reduction in coliformn
-service-levelV apprach to valuation. This approach rec- contamination of the water approached $1,000 per unit
ognizesthat environmenal services are valued differ- serviced. An education program that improved water
-entlybydifferentusersandalsoattemptstoassess indi- use led to further reductions in health and transport
rect effects of water poDvision. =
costs. After these indirect benefits were factored in, the
FKathmandu has l.miiilioninhabitanta Based on esti- - project showed a positive net benefit of about $275
mates using nannwly defined pFoect apprai tech- million. -
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