A Sourcebook - UN-Water

Table 4.1 Corruption and Sector Performance Indicators
Indicator Description Possible relationship to poor governance or corruption (or both)
Water and
sanitation
coverage
Nonrevenue
water
Collection
ratio
Cost
recovery
Water coverage refers
to the percentage of the
population with access to
an improved water source.
Sanitation coverage refers
to the percentage of the
population with access to
private or shared (but not
public) excreta disposal
facilities.
Water that has been
produced and is “lost”
before it reaches the
customer. Losses can
be “physical” losses (for
instance, through leaks) or
“commercial” losses (for
instance, through theft or
metering inaccuracies).
Percentage of bills
collected.
The capture—through fees,
subsidies, or other explicit
transfers of funds—of the
cost of providing water
and sanitation services.
Good coverage indicates that the sector is putting resources to good
use. However, water coverage must be understood in the country
context. For instance, developed countries will tend to have better
coverage than less-developed countries, and countries that are low
cost to serve will tend to have higher coverage than countries that
are high cost to serve. In this sense, as an indicator or “red flag” of
corruption, water coverage should be assessed in terms of how far
coverage is from where it might be expected to be, given income
and geography.
High physical losses may indicate a corruption risk. For instance,
under-investment in pipes may be the result of:
• A tendency to misuse resources generally
• Poor quality of construction and repair work
• A bias toward large capital projects.
High commercial losses show a chaotic commercial system, which
often allows corruption to thrive.
A low collection ratio indicates lack of discipline in commercial
and financial systems in the sector. This lack of discipline will allow
corruption to thrive.
Sectors which recover some margin above operating and
maintenance (O&M) costs tend to be less corrupt than ones where
tariff revenue is less than or equal to O&M costs. This may be because
sectors or providers which are recovering their costs are more
likely to have effective processes for financial management and
accountability in place. Alternatively, if a utility isn’t recovering costs,
employees are less likely to feel pressure for any kind of commercial
discipline—that will allow corruption to thrive. Finally, research
suggests that utilities that recover a majority of costs from their
customers are more likely to be accountable to their customers. a
a
Schwartz, K.(2006). “An assessment of bureaucratic and New Public Management models in the water supply and sanitation
sectors in low- and middle-income countries”. UNESCO-IHE Institute for Water Education
Box 4.1 Displays of Wealth in a South Asian Community
In South Asia, a donor-funded poverty reduction project included the construction of septic tanks in locations selected
by communities. Following a competitive tender, the municipality noted that the bids received were all three
times the standard unit rate. To get around what was perceived as collusion amongst the tenderers, and high prices,
the chief municipal engineer proposed to the community that they take on the construction of the project—it would
also provide work for community members. This was agreed and two community leaders, the most educated, were
given the task of managing the finances. Initially, there were some concerns that the accounts were not open to the
rest of the community, but when one leader started smoking imported cigarettes rather than the local ones, the community
lost faith and in a public meeting involving donor representatives, demanded that the accounts be made
public. The costs of materials and payment for labor were posted at the entry to the slum at the end of each week for
the remainder of the work.
Source: Plummer, J. (2007). “Making Anti-Corruption Approaches Work for the Poor: Issues for Consideration in the Development
of Pro-Poor Anti-corruption Strategies in Water Services and Irrigation”. Swedish Water House Policy Brief No 4, page 6
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