The Political economy of Sanitation: - WSP

Water and Sanitation Program: Technical PaperWSP Sanitation Global Practice TeamThe Political Economyof Sanitation:How can we increase investmentand improve service for the poor?Operational experiences from case studies in Brazil, India,Indonesia, and SenegalFebruary 2011The Water and Sanitation Program is a multidonor partnershipadministered by the World Bank to support poor people in obtainingaffordable, safe, and sustainable access to water and sanitation services.

The findings, interpretations, and conclusions expressed herein are entirely thoseof the author and should not be attributed to the World Bank or its affiliatedorganizations, or to members of the Board of Executive Directors of the WorldBank or the governments they represent. The World Bank does not guarantee theaccuracy of the data included in this work. The boundaries, colors, denominations,and other information shown on any map in this work do not imply any judgmenton the part of the World Bank Group concerning the legal status of any territoryor the endorsement or acceptance of such boundaries.The material in this publication is copyrighted. Requests for permission toreproduce portions of it should be sent to wsp@worldbank.org . WSP encouragesthe dissemination of its work and will normally grant permission promptly. Formore information, please visit www.wsp.org .© Water and Sanitation Program

Table of contentsAcknowledgments ...................................................................................Executive summary ..................................................................................I. Background and study objectives ..................................................II. Conceptual framework and methodology ......................................2.1 Conceptual framework ..............................................................2.2 Methodology .............................................................................III. Diagnostic findings from the field ...................................................3.1 Country context .........................................................................Cultural and historical context ....................................................Political opportunism and investment promotion ........................Global policy debate and external aid agencies .........................3.2 Sector arena ..............................................................................Institutional challenges and opportunities ...................................Budget allocations and disbursements ......................................Corruption and rent seeking ......................................................Technological choice and pro-poor sanitation provision .............Private sector involvement .........................................................Demand for sanitation services and willingness to pay ...............Sanitation as vote winner or career maker? ...............................3.3 Sector process ..........................................................................Civil society participation and citizen oversight ...........................Evidence-based policy making in sanitation ...............................Relationship between accountability and sanitationinvestment .................................................................................Sector coalitions ........................................................................3.4 Interplay of political and economic factors on sanitationoutcomes ..................................................................................IV. Operational implications .................................................................4.1 Timing, tailoring, and location of investment and operations ......4.2 Understanding the sector through rigorous analysis ...................4.3 Realigning accountability ...........................................................4.4 Partnership strategy ..................................................................4.5 Public debate and communication ............................................561013131517171718181919242627282829323233343535383839404141www.wsp.org1

V. Conclusions ...................................................................................References ..........................................................................................Annex A - Methodology ....................................................................A.1 Research hypotheses and questions ....................................A.2 Research methods, analytical tools, and process ..................A.3 Research sampling and stratification .....................................A.4 Feedback, reporting, and dissemination ................................A.5 Methodology modifications based on the experienceof this study ..........................................................................Annex B - Case study summaries ....................................................B.1 Brazil ....................................................................................B.2 India .....................................................................................B.3 Indonesia ..............................................................................B.4 Senegal ................................................................................Annex C - Terms of reference ...........................................................Abbreviations .......................................................................................4345474752555556575759626569842Global Practice Team of Sanitation

List of tables, figures, and boxesTable 5.1 Added value from political economy analysis insupport of pro-poor sanitation investment ......................Table A.1 Issues emerging from the desk review ............................Table A.2 Research hypotheses and questions ..............................Table A.3 Overview of methods and stakeholders byframework element ........................................................Figure 2.1 Conceptual framework for the politicaleconomy of sanitation ....................................................Figure 3.1 Institutional landscape of urban sanitation inSenegal (specific focus on Dakar) ..................................Figure 3.2 Sanitation sector stakeholders’ ideological positions,Brazil .............................................................................Figure 3.3 Stakeholders, interests, and power in negotiations overprovisions in the ‘Sanitation Law’ to strengthen the roleof municipalities .............................................................Figure 3.4 Institutional map of the urban sanitation sector,Indonesia .......................................................................Figure 3.5 Organizational mapping of the budget process for urbansanitation in Senegal ......................................................Figure 3.6 Budget decisions and resource flows for sanitationinvestment grants and loans in Brazil .............................Figure 3.7 Power/interest matrix, rural sanitation investment,Maharashtra, India .........................................................Figure 3.8 Election poster in Senegal’s local elections 2009 ............Figure A.1 Stakeholder mapping: Interest in sanitation investment ..Figure C.2 Political Economy Framework ........................................Box 2.1 Sample question for political economy analysisof sanitation investments: Diagnostic framework ...........Box 2.2 Brief summaries of the four case studies ........................Box 3.1 Consumer action: The Cambérène treatmentplant in Dakar .................................................................Box C.1 Poverty and Social Impact Analysis (PSIA):One approach to help better understand andaddress the political economy of sanitation ....................44474855132021222325263132548314162971www.wsp.org3

4Global Practice Team of Sanitation

The Political Economy of SanitationAcknowledgmentsAcknowledgmentsThis report presents the results of a Global Economic andSector Work (ESW) Study on the Political Economy ofSanitation in Brazil, India, Indonesia, and Senegal that wasconducted by the Water and Sanitation Program (WSP) andthe World Bank. The purpose of the study is to help WSPand the World Bank—through a better understanding of thepolitical economy of sanitation—in their efforts to supportpartner countries and development practitioners in the design,implementation, and effectiveness of operations thataim to provide pro-poor sanitation investments and servicesto improve health and hygiene outcomes.This synthesis report was prepared by Sabine Garbarino andJeremy Holland (Oxford Policy Management), with SimonBrook, Ken Caplan and Alex Shankland (OPM consultants).The background literature review, the research strategy, andthe report were authored by Jeremy Holland and SabineGarbarino, who also led the case studies for India and Senegal,respectively. Kit Nicholson and Jeremy Colin providedvaluable contributions to the research design. The case studyfor Brazil was led by Alex Shankland and Ken Caplan, andthe Indonesia case study was led by Simon Brook. The casestudies benefited from vital support from national sanitationexperts and researchers, namely, Ivan Paiva, Klaus Neder,Hernán Gómez Bruera, and Luciana Lupo (Brazil); PadmajaNair (India); Risang Rimbatmaja and Prathiwi Widyatmi(Indonesia); and Ousseynou Guène (Senegal).The study was conceptualized and financed by the WSPSanitation Global Practice Team and the World Bank. Theauthors carried out their work under the leadership of EduardoA. Perez (Senior Sanitation Specialist, TWIWP, WSP),Sabine Beddies (Senior Social Scientist, MNSSO, WorldBank), and Pete Kolsky (Senior Water and Sanitation Specialist,TWIWA, World Bank). Input was provided by TinaSoreide (Economist, FEU, World Bank) and Daniel AlbertoBenitez, (Senior Economist, FEU, World Bank). Guidance atthe Concept Note stage was provided by the following Bankstaff: Eustache Ouayoro (Country Director, LCCHT), JunaidAhmad (Sector Manager Urban and Water, AFTUW), andMeskerem Brhane (Senior Urban Specialist, MNSUR).WSP and World Bank colleagues actively contributed to thecase study design and reviewed the draft country case studies.These include Joseph Ravikumar (Senior Water and SanitationSpecialist, TWISA), J. V. Raman Murthi (Water InstitutionsDevelopment Specialist, TWISA), Soma Ghosh Moulik(Senior Institutional Development Specialist, SASDU),Pierre Boulenger (Senior Water Supply Specialist, TWIAF),Ousseynou Diop (Senior Water and Sanitation Specialist,TWIAF), Isabel Blackett (Senior Water and Sanitation Specialist,TWIEA), Martin Gambrill (Senior Water Engineer,SASDU), Carlos Velez (Lead Economist, LCSUW), ThadeuAbicalil (Senior Water and Sanitation Specialist, LCSUW),Juliana Garrido (Infrastructure Specialist, LCSUW), andAbel Mejia (Sector Manager, TWIWA).The peer reviewers were Ede Ijjasz-Vasquez (Sector Manager,EASCS), Ivo Imparato (Senior Urban Specialist, LCSUW),and Ed Campos (Advisor, WBIGV). Written comments werereceived from Verena Fritz, Governance Specialist, PRMPS).Alice Poole (Extended Term Consultant, PRMPS) providedcomments during the review meeting.Funding for the study came from the Multidonor Trust Fundsof WSP, the Sanitation Hygiene and Wastewater SupportServices (SWAT) of the Water Partnership Program of theWorld Bank, the German Poverty and Social Analysis TrustFund, the Social Development Department (SDV), and theFinance, Economics and Urban Dept (FEU).www.wsp.org5

The Political Economy of SanitationExecutive summaryExecutive summaryBackground and objectivesAccording to the Human Development Report 2006 (UNDP2006), 2.6 billion people—about half of the world’s population—lackaccess to basic sanitation. There is ongoingconcern that governments, at many levels, are not devotingenough attention and resources to sanitation services, particularlywhen compared to spending on water supply andother infrastructure services. Additionally, existing sanitationinvestments and service provision rarely place sufficient stressupon the distinct and urgent needs of the poor. Recent WorldBank research shows that this limited focus on sanitationis driven largely by political motivation in the context ofcompeting demands for resources, and to a lesser extent bytechnical or economic considerations.This global study on the political economy of sanitationin Brazil, India, Indonesia, and Senegal—conceptualizedand financed by the Sanitation Global Practice Team ofthe Water and Sanitation Program (WSP) and the WorldBank—attempts systematically to understand and thus helppractitioners manage the political economy of pro-poor sanitationinvestments and service provision. It aims to providepractical advice to World Bank Task Team Leaders and othersanitation practitioners to help them better manage stakeholderrelations and effectively maneuver within the complexinstitutional relationships of the sanitation sector in orderto enhance the design, implementation, and effectiveness ofoperations that provide pro-poor sanitation investments andservices. The ultimate goal is to improve health and hygieneoutcomes.This study follows current approaches to political economy—interdisciplinary inquiry drawing upon social and politicaltheory and economic principles—to understand how politicalactors, institutions, and economic processes influenceeach other. The “political economy of sanitation,” therefore,refers to the social, political, and economic processes andactors that determine the extent and nature of sanitationinvestment and service provision.Conceptual framework, methodology, and case studyoverviewsThis study’s conceptual framework combines a diagnosticcomponent with a typology of actions to help translateanalytical findings into more effective support to operationsand investments. The Diagnostic Framework aims to identifypolitical economy constraints as well as opportunities thatare entry points for subsequent operational actions. It doesthis by focusing on understanding country context, the sectorarena—institutions that shape stakeholder relationships,interests, and influence—and the sector process, which looksat information flows, public debate, coalition building, andparticipation over time. The Action Framework illustratesoperational implications and practical advice to Task TeamLeaders and practitioners to support sector investments. Itdemonstrates how an analysis of the political economy ofsanitation can be translated into project design and action tobetter meet the sanitation needs of the poor. The Action Frameworkincludes recommendations to improve the timing,tailoring, and sequencing of support to sector investment,informed by an understanding of the relevant institutionalconstraints and opportunities as well as key participants inthe sanitation sector. The Action Framework furthermorestresses the importance of strengthened relationships of accountabilityamong citizens, civil society organizations, andgovernment and other service providers. Finally, a partnershipstrategy—often linked to an inclusive communicationsstrategy and measures to foster public debate—providesopportunities to overcome institutional constraints andstakeholder opposition to pro-poor sanitation investmentand service provision.The study was conducted through a qualitative analysis ofstakeholders, institutions, impacts, risks, and opportunitiesthat was linked to processes and policy debate. This SynthesisReport is based on the findings from the secondary literaturereview and the results of primary research in the four casestudy countries, which examined how each had identifiedand managed political economy risks and opportunities in6Global Practice Team of Sanitation

The Political Economy of SanitationExecutive summaryits sanitation interventions. The four country case studieswere chosen purposively by the World Bank/WSP team andrepresent a range of sanitation contexts. The Brazil case studyanalyzed the national-level political economy dynamics ofurban sanitation investment over the lifetime of the Waterand Sanitation Sector Modernization Project (known inBrazil as Programa de Modernização do Setor Saneamento,PMSS). In addition to this national (policy) component, thecase study includes a regional (program) component thatfocused on the Bahia Azul program, implemented by theBahia state utility, Empresa Bahiana de Águas e Saneamento(EMBASA), in the Salvador Metropolitan Region in northeasternBrazil. The India case study looks at the politicaldrivers for the success of the Total Sanitation Campaign(TSC) in rural Maharashtra, contrasting it with earlier, failedattempts to implement TSC in most of the country’s states.In Indonesia the analysis focused on the reasons behind therecent increase in government interest in urban sanitationprovision. While this interest has not yet translated intoincreased investment levels, it constitutes a major shift fromthe previous understanding that sanitation is a private matterfor households. Finally, the Senegal case study took the waterand sanitation reforms at the end of the 1990s as the startingpoint of the analysis and explored political economy factorsthat explained the increased investment in urban sanitationin the capital, Dakar.Diagnostic analysisCountry context refers to a country’s socioeconomic, political,cultural, and historical characteristics, including itsdevelopment trajectory and the current development aidarchitecture. Examining country context also involveslooking at political processes within the sanitation sector,their potential links to national political institutions andstakeholders, the assumptions that underpin sanitation sectorinvestment, and how and why sanitation investment wasdeveloped, and by whom. The research tests the influenceof cultural and historical factors on sanitation attitudes andbehavior, outlines the multifaceted risks and opportunitiesthat decentralization provides for sanitation investments,and examines the extent to which political opportunismdetermines sector decision making.Beyond sanitation’s country context, a political economyanalysis focuses attention on the sector arena - the formaland informal institutional arrangements that govern relationsand behaviors of stakeholders, as well as those stakeholders’interests in the choice, management, and implementationof sanitation service provision and investments. The studyshowed that perceived political rewards, organizational resistancefrom the center of government, and/or implementers’lack of capacity to manage increased budget allocations significantlyinfluenced whether and how policy priorities aretranslated into budget allocations and disbursements. Politicallymotivated decision making was found to be driven by apreference for highly visible, big infrastructure investments.In some but not all instances this is linked to opportunitiesfor influential individuals or groups to use these investmentsto generate income by privileged access or politically createdmonopolies (rent seeking). 1 While all case studies came acrossevidence of corrupt practices and rent-seeking behavior, itwas overall not identified as the predominant feature distortingsanitation investment decisions. There is evidence thatcivil society and the private sector not only can contributeto strengthening accountability but also can be reliable andtrusted partners for delivering sanitation services and creatingcommunity demand for sanitation provision.The sector process in this context refers to the dynamic and ongoingprocess of negotiation, bargaining, and identificationof political economy risks and opportunities by governmentand development agency stakeholders. The study explores thepotential for community participation, incentives for collectiveoutcomes (an end to for example open defecation), and thetrade-offs that strong political backing can have in terms ofa sustainable engagement with a range of local stakeholders,including civil society and private sector organizations. Thesector process discussion looks in detail at the role of evidencein decision making and considers when and how research wassuccessfully used to inform investment decisions. Finally, thisstudy confirms the potential of individual sector championsto secure higher priority for sanitation investments.The research looked particularly for evidence of the impacton distributional outcomes in pro-poor sanitation investmentfrom the interplay of political and economic factors. Somecase studies found that political incentives (for example, careeradvancement or electoral support) played a positive role1 Rent seeking generally implies the extraction of uncompensated value from others without making any contribution to productivity.www.wsp.org7

The Political Economy of SanitationExecutive summaryAdded value from political economy analysis in support of pro-poor sanitation investmentActionOptimize timing,tailoring, andlocation ofinvestment andoperationsUnderstand thesector throughrigorous analysisRealignaccountabilityPartnerstrategicallySupport publicdebate andcommunicationSource: Authors’ analysis.Recommendations for donor/lendersupport for pro-poor sanitationinvestment• Ensure that support to sanitationinvestment is aligned with existingpolicy and planning cycles.• Recognize windows of opportunityfor reform.• Use available evidence and/orcommission research to informprogram design.• Support strengthened technicalsystems and information flows.• Support decentralization andclarification of technical roles andresponsibilities.• Ensure effective engagement withkey central and sector ministries.• Support information campaigns“from one to many” (policy makers topublic).Recommendations and added value insightsfrom political economy analysis• Manage the political economy risks and opportunities to increaseimpact on pro-poor sanitation investment.• Ensure careful and strategic sequencing of operations to increase theoverall impact of investments in later phases.• Lobby through political economy insights for sanitation investmentsthat are effective in different locations.• Recognize and support government commitment and localleadership to help partners succeed and scale up their impact.• Identify opportunities to support investment through politicalincentivizing.• Donors and lenders are well placed to identify appropriate evidencefor different stakeholders and tend to have a comparative advantagein providing rigorous analysis to inform reform and sector choices.• The timing of information flow is important. Even when rigorousanalysis is undertaken dissemination of key findings can get lost,sidetracked, potentially misused, or captured if the timing is wrong(for example, at the start of a new political administration).• Use analysis of comparative advantage in global practice to supportlocal policy makers and administrations to learn lessons fromelsewhere and refine their operational framework.• Support strengthened horizontal accountability through carefuldesign of contracts and specification of roles and responsibilities.• Support initiatives to build demand and strengthen verticalaccountability.• Be flexible: Adapt and support models of vertical accountabilityand apply to the country context. The sector process may not becharacterized by the kinds of vertical accountability relations centralto much donor and lender thinking. This means that support foraccountability must be tailored to the country context.• Realign accountability by combining horizontal accountability withvertical accountability to allow, for instance, top-down changes tobe complemented by a more systematic attempt to engage withgrassroots, collective association and mobilization for institutionalchange.• Ensure that the partnership strategy is based on sustained, flexibleengagement with strategic external support.• Get the process of political economy analysis right: Ensure, whereappropriate, that analysis is conducted with a broad group ofstakeholders to ensure greater inclusion, and link this process tostrengthened public debate and communication.• Support wide two-way communication to democratize debate,prevent capture, and secure and sustain public support forinstitutional change.www.wsp.org9

I.Background andstudy objectivesThe Human Development Report 2006 (UNDP 2006) statesthat 2.6 billion people—about half of the world’s population—lackaccess to basic sanitation. The majority live inlow- and middle-income countries: three out of five peoplein low-income countries, one in three in middle-incomecountries, and one in six in upper-middle-income countrieshave no access to basic sanitation. Without a rapid increasein the scale and effectiveness of sanitation programs, theMillennium Development Goal (MDG) target for 2015 willbe missed by a wide margin. 1 This will have severe impacts onpublic health, social indicators, well-being, human dignity,and economic development worldwide.While 2.6 billion people do not have access to a pit latrine ortoilet in their homes, many more lack access to the kinds ofsanitation provision that minimizes the risk of excreta-relateddiseases. This difference between “improved” and “adequate”sanitation shows the difficulties in knowing where and howto define and measure who is adequately served by sanitationservices. 2 Needless to say, different standards for sanitationare associated with different levels of health risk. Moreover,moving up the so-called sanitation ladder—starting fromvery basic pit latrines to improved pit latrines, pour-flush facilitiesusing water and septic tanks, through to conventionalsewers—has financial implications. According to the HumanDevelopment Report 2006, it costs 20 times more to connecta household to a modern sewerage system than to purchasea basic pit latrine. Also, any form of improved sanitation hasto compete with cheap practices like defecating in the openor in a plastic bag.All good sanitation has the same basic attributes, but differentcontexts influence which form of sanitation worksbest where. The “best” sanitation model is influenced bypopulation concentration (individual farms in remoterural areas versus mega-cities), population density, sitecharacteristics (for example, the level of the water table),the resources available to an individual, and the capacityof government provision. Where sewerage systems in ruralareas are often not available, simple pit latrines and septictank latrines are plausible options. In high-density urbanareas, sewerage systems have obvious advantages. However,where the reach of the sewerage network is limited and alarge part of the population is not served, costs associatedwith connecting all households can be substantial, althoughthis may be offset by the adverse impact on health if less thanthe entire community is covered. Often, sewerage systemsare sold (at a high cost) as a solution to all the problemsassociated with the temporary storage of human waste andits collection, transport, treatment, and disposal. However,they work well only if everyone is connected, and in manycases it is the poor who have no access.There is ongoing concern that governments, at many levels,are not devoting enough attention and resources to sanitationservices, particularly when compared to spending onwater supply and other infrastructure services. While thereare no general figures showing on- and off-budget expendituresin the sanitation sector at regional levels, evidence at thecountry level illustrates that investments and expenditures1 Millennium Development Goal 7, Target 7c, calls on countries to «Halve, by 2015, the proportion of people without sustainable access to safe drinking-water and basicsanitation.»2 For definitions and categories please see the WHO / UNICEF Joint Monitoring Programme (JMP) for Water Supply and Sanitation, http://www.wssinfo.org/definitions/infrastructure.html.10Global Practice Team of Sanitation

The Political Economy of SanitationBackground and study objectivesare very low compared to those for water supply and otherinfrastructure services. Additionally, existing sanitationinvestments and service provision are not always pro-poor.Efforts to increase access to sanitation infrastructure provisioncan benefit better-off urban residents at the expense ofthe urban poor, slum dwellers or the rural population. Manydocuments suggest that governments’ limited sanitationexpenditures are determined largely by political, rather thantechnical or economic constraints in the context of competingdemands for resources (Kolsky et al., 2005; World Bank2006; Satterthwaite and McGranahan 2006).It is against this background that the Sanitation Global PracticeTeam of the Water and Sanitation Program (WSP) andthe World Bank commissioned a global study on the politicaleconomy of sanitation with case studies from Brazil, India,Indonesia, and Senegal. The purpose of the study is to helpWSP and the World Bank—through a better understandingof the political economy of sanitation—in their efforts tosupport partner countries and development practitioners inthe design, implementation, and effectiveness of operationsthat aim to provide pro-poor sanitation investments andservices to improve health and hygiene outcomes.The study uses the strict definition of sanitation as “the safemanagement of excreta” only. This excludes considerationof drainage and solid waste management, which often havea higher political profile and expressed demand. We acknowledgethat the chosen definition has implications for astudy of this sort. There are potential benefits to adopting abroader definition, for example, around mobilizing supportfor investment. There are also drawbacks of expanding thedefinition, particularly if support mobilized for wider elements,such as solid waste management, diverts resourcesaway from excreta.Considering these tradeoffs, a political economy frameworkis well suited to address the study’s key questions:• Why are sanitation investments and service provisionnot given adequate priority in both lending andnonlending work?• When sanitation investments in such efforts areundertaken, why are they not strategically targetedtoward increasing access to sanitation for the poor?The primary audience for this study includes World Bankoperational task teams engaged in projects, programs,and nonlending activities involving sanitation, as well asCountry Management Units. The study aims to enhanceoperational design and implementation for improvedoutcomes in the provision of pro-poor sanitation servicesby providing World Bank Task Team Leaders and othersanitation practitioners with tools to understand and moreeffectively manage the political economy of sanitation. Theaudience for this work will have diverse backgrounds andwill include social scientists and sanitation engineers. Thereport therefore attempts to use language and terminologyunderstood by all readers. When political economy andsanitation-specific terminology is used, we provide explanationswhere necessary.The term political economy itself is subject to multipleunderstandings and definitions. In its original use in academicliterature, political economy referred simply to theapplication of economic principles to the practice of publicpolicy of nation-states. We follow the current commonunderstanding of political economy as referring to interdisciplinarystudies that draw upon social and political theory,in addition to economic principles, in order to understandhow political actors, institutions, and economic processesinfluence each other. 3The political economy of sanitation, therefore, refers to thesocial, political, and economic processes and actors thatdetermine the extent and nature of sanitation investmentand service provision. Understanding and managing thepolitical economy of sanitation consists of identifying and3 For an overview of political economy, see, for example, World Bank/OPM 2008.www.wsp.org11

The Political Economy of SanitationBackground and study objectivesaddressing stakeholder interests and institutional determinantsof sanitation investment process and outcomes,including an assessment of the risks and opportunities forbetter management of political economy toward pro-poorinvestment. 4This Synthesis Report goes beyond a consolidation of thefour country case studies to provide common lessons andconcrete operational recommendations and guidance thatsanitation practitioners can apply to their work. It seeks tosupport and enhance policy dialogue as well as the design,implementation, and performance of evidence-based andpro-poor sanitation operations.The Synthesis Report is structured as follows: Section 2 presentsthe study’s conceptual framework, which is based onearlier work on the political economy of policy reform (WorldBank/OPM 2008) and was tailored to this study. Section 2also briefly summarizes the study’s methodology.Section 3 uses the Diagnostic Framework to synthesize thecase studies’ findings with reference to a set of study hypothesesand specifically looks at evidence on the distributionalimpact of sanitation investments.Applying the Action Framework, section 4 outlines a numberof significant operational lessons from the country case studiesthat can help inform future World Bank interventionsthat support sanitation investment.Section 5 briefly concludes by pointing out the value thata better understanding of the risks and opportunities associatedwith institutions and stakeholder interests in thesanitation sector can add to support sanitation investmentand service delivery.Annex A provides a detailed overview of the study’s methodology,and annex B presents summaries for the four casestudies in Brazil, India, Indonesia, and Senegal.4 While the study’s terms of reference define sanitation as «infrastructure and service provision required for the safe management of human excreta, for example, latrines, sewers,and wastewater treatment,» some of the case study country contexts or programs utilize different definitions that do not necessarily count as «safe management of human excreta»and are not considered as «improved» sanitation by the UNICEF/WHO Joint Monitoring Program.12Global Practice Team of Sanitation

II.Conceptualframework andmethodology2.1 Conceptual frameworkThe conceptual framework for the research, illustratedin figure 2.1, describes how political economy influencessector investments. The framework was initially developedby the World Bank Social Development Department andwas tailored to the sanitation context within this study. It isone of several similar frameworks used by development andresearch organizations for political economy analysis.FIGURE 2.1 CONCEPTUAL FRAMEWORK FOR THE POLITICALECONOMY OF SANITATIONDiagnostic FrameworkCOUNTRY CONTEXTCountry's socioeconomic, historical andcultural characteristicsPolitical processes within the sanitation sectorSECTOR ARENAStakeholders &institutions:Economic interests(rents, asset, capture,etc)Political interest(authority, clientelism,etc.)SECTOR PROCESSDialogue & decisionmakingCoalition buildingParticipationPublic debate &informationSource: Authors, based on World Bank/OPM 2008.The Diagnostic Framework (left hand side of figure 2.1)focuses on analysis and understanding the country context,sector arena, and sector process.Action FrameworkTiming, tailoring and locationof investment and operationsUnderstanding the sectorthrough rigorous analysisRealigning accountabilityPartnership strategyPublic debate andcommunication1. Country context refers to a country’s socioeconomic,political, cultural, and historical characteristics,including its development trajectory and the currentdevelopment aid architecture. It also looks at politicalprocesses within the sanitation sector, the potentiallinks to national political institutions and stakeholders,the assumptions that underpin sanitation sectorinvestment, and how and why sanitation investmentwas developed, and by whom.2. Sector arena comprises theinstitutions that govern relationsand behavior within the sanitationsector and the stakeholders, with theireconomic and political interests thatboth influence and are affected by thechanges in sanitation service provisionand investment.3. Sector process refers to changethrough information flows, publicdebate, coalition building, participation,transparency, communication, and theinteraction of actors in the sanitationsector arena over time.The Action Framework (right handside of figure 2.1) illustrates operationalimplications and offers measures thatdevelopment practitioners such asWorld Bank Task Team Leaders andtheir government counterparts can useto design and implement pro-poorsanitation services and investments. It demonstrates howan analysis of the political economy of sanitation can betranslated into project design and action to better meetwww.wsp.org13

The Political Economy of SanitationConceptual framework and methodologyBox 2.1 Sample questionS for political economyanalysis of sanitation investments: DiagnosticFrameworkCountry contextHistorical legacies: What is the past history of the sector,including previous reform initiatives? How does this influencecurrent stakeholder perception?Cultural and religious context: To what extent do religious orcultural values shape public debate around sanitation anddemand for services?Ideologies: What are the dominant ideologies that shape viewsand debates around the sanitation sector?Policy context: What is the policy context for sanitation? Isthere a (pro-poor) vision for sanitation? What is its relationshipto the water sector?Sector arena—institutions and stakeholdersDecision making and budget allocations: How are decisionsaround budget allocations made within the sanitation sector?National—subnational relationships: What is the institutionalrelationship between national and subnational governments?Are subnational governments accountable to the national levelor local electorate?Power relations: To what extent is power over investmentdecisions vested in the hands of specific individuals/groups?Which interest groups and population groups do politiciansrepresent when deciding over sanitation investments? Howdo different interest groups outside government (for example,private sector, NGOs, consumer groups, the media) seek toinfluence policy?Corruption and rent seeking: Is there significant corruption andrent seeking in the sector? Where is this most prevalent (forexample, at point of delivery; procurement; allocation of jobs)?Who benefits most from this? What are the consequences(for example, preference of investment in big infrastructureprojects)?Financing: What is the balance between public and privateinvestment? How is the sector financed (for example, public/private partnerships, user fees, taxes, donor/lender support)?What are the discussions around cost recovery?Demand for services: To what extent is there a demand forsanitation services from the communities? What are the factorsshaping community demand for improved sanitation?Sector processSector champions: What role do champions play in raisingthe profile of sanitation and supporting increased sector investment?Civil society: What roles do media, NGOs, and communitybasedorganizations (CBOs) play in the sector?Development partner influence: How do donors and lendersattempt to influence decision making and reform implementationin the sanitation sector?Source: Authors, based on World Bank 2007, OPM 2009a, and DFID 2009.See also annex A, table A.2.the sanitation needs of the poor. Effective management ofthe political economy of sanitation, in the terms of thisstudy, integrates a better understanding of the politicaleconomy and of policy impacts with actions that promotegreater accountability, partnership and communication. TheAction Framework therefore emphasizes first the timing,tailoring, and locating of support to sector investment inorder to address political economy risks and opportunities.Alongside the operational objective of identifying thepolitical economy risks to sector progress is the need toidentify the social and economic risks of sector policy andinvestment in terms of distributional equity. Rigorous andtransparent analysis of the poverty and social impacts ofpolicy impact is therefore an important element of thisAction Framework. 5Ongoing analysis can continue to generate feedback forreflection and course corrections through monitoring andevaluation (M&E) and dissemination.The Action Framework also stresses the importance ofrealigning accountability in sanitation investment toempower citizens to hold policy implementers (governmentor private service providers) accountable. On the supply sideof this accountability equation, legislation and regulationcan reduce undesirable political economic influence. On thedemand side, mobilizing and empowering poor consumersand communities can increase access and strengthen theequity outcomes of sanitation investment. The sustainability,effectiveness, and impact of sector investment are in largepart a function of developing institutions and building thecapacities of the actors involved. These institutions and actorscan include government agencies, contractors and serviceregulators, implementing/delivery agencies, and producerand consumer institutions.5 The Poverty and Social Impact Analysis (PSIA) approach was jointly developedwithin the Bank by the Social Development Department and the PREM PovertyReduction Department, with collaboration from a range of bilateral developmentpartners, such as the UK’s Department for International Development (DFID)and the German Development Cooperation (see World Bank 2003). The politicaleconomy framework used in this study is based on what might be termed «thesocial perspective of PSIA» and was developed by the Bank’s Social DevelopmentDepartment with Oxford Policy Management (OPM). See The Political Economy ofPolicy Reform: Issues and Implications for Policy Dialogue and Development Operations(World Bank/OPM 2008).14Global Practice Team of Sanitation

The Political Economy of SanitationConceptual framework and methodologyThe Action Framework stresses the need for a partnershipstrategy to address and overcome blockages to pro-poorsanitation investment. This broad-based partnership strategycan be linked to an inclusive and widespread public debateand communications strategy that ensures transparency andhelps reduce suspicion, resistance, or ideological capture.In this way, evidence transparently produced and widelydebated becomes an opportunity for a sector dialogue witha two-way communication that shapes service provision andinvestment and moves communication away from a publicrelations exercise.2.2 MethodologyThis Synthesis Report consolidates the findings from asecondary literature desk review (OPM 2009b) and theresults of fieldwork in Brazil, India, Indonesia, and Senegal.The fieldwork employed a mixed-method approach, primarilyusing qualitative analysis of stakeholders, institutions, andprocesses, complemented by quantitative data and analysisof budget allocation and coverage. Data collection wasnecessarily limited by the time and resources available forthe fieldwork phase. A fuller discussion of the methodologyis found in annex A.Using and refining the conceptual framework that wasdeveloped through earlier work (World Bank/OPM 2008),the review included analysis of (1) key political economyliterature in the sanitation sector in general; (2) the mainissues of the political economy of sanitation in Brazil, India,Indonesia, and Senegal; and (3) an overview of the politicaleconomy issues regarding WSP and World Bank projects inthe case study countries. The results from the review were usedto identify research hypotheses and questions. A universalset of research hypotheses and questions was developedduring the inception phase of the study for each part of theDiagnostic Framework. These are listed in annex A. Thesehypotheses and questions were then tailored to each country casestudy context. A sample of political economy questions linked tothe Diagnostic Framework is provided in box 2.1.The fieldwork data collection was driven by two qualitativeresearch methods: semistructured key informant interviewsand focus group discussions. Interviews were conductedwith key informants from national and subnationalgovernment, private and public service providers, civilsociety, international donors and lenders, and project teams.Focus group discussions were conducted with representativesfrom private sector and civil society stakeholder groups.Two analytical instruments—stakeholder analysis andorganizational mapping—were used to examine the interplaybetween political factors and economic factors by assessingstakeholder influence and interests, formal and informalinstitutions, and respective dynamics and processes.The countries for case studies were chosen purposively bythe World Bank/WSP team. The countries selected representa range of sanitation contexts identified to generate usefuloperational lessons learned through the application ofpolitical economy analysis 6 . Within the selected countries,there was an element of initial stratification involved in thepurposive sampling methodology. In the case of Brazil, forexample, discussions of project contexts identified a typologyof urban sanitation contexts and then purposively selectedsites based on their learning potential. Annex B providesdetailed summaries for all the case studies. Brief overviewsare provided in box 2.2.A time lag was deliberately built into the fieldwork schedulefor the global study, with fieldwork conducted in India aheadof subsequent fieldwork in Brazil, Indonesia, and Senegal.Methodological lessons learned from India subsequentlyinformed research in the other three case studies.6 Case studies were selected based on the following criteria: the existence of WSP and Bank sanitation operations, in order to assess how they have managed political economy issues;interest by task teams; the presence of political economy issues commonly faced by the sanitation sector, in order to draw transferable lessons for other countries and regions;the opportunity to examine basic access versus improved sanitation via urban/rural infrastructure investments; available information on both demand and supply side aspects ofgovernance; different degrees of decentralization; community and private sector engagement, in order to learn from non–public sector schemes; and an urban/rural and regionalmix of cases.www.wsp.org15

The Political Economy of SanitationConceptual framework and methodologyBox 2.2 Brief summaries of the four case studiesBrazil: The case study analyses the national-level politicaleconomy dynamics of urban sanitation investment over thelifetime of the Water Sector Modernization Project (known inBrazil as Programa de Modernização do Setor Saneamento,PMSS). Since the PMSS launch in 1993, Brazil’s urban sanitationsector has undergone an institutional transformationand gained a reputation for innovative and pro-poor sewerageprograms. In addition to this national (policy) component,the case study includes a regional (project) component thatfocuses on the Bahia Azul program, implemented by the stateutility Empresa Bahiana de Águas e Saneamento (Water andSanitation Company of Bahia, or EMBASA) in the Salvadormetropolitan region in northeastern Brazil.India: The case study looks at the political drivers for thesuccess of the Total Sanitation Campaign in rural Maharashtra.Designed as a supply-driven sanitation program, the campaignhas a set of defined components that include information,education and communication, community mobilizationactivities, construction of household toilets and communitycomplexes, and provision of toilets in government schoolsand anganwadis. 7 The India case study examines why theTotal Sanitation Campaign failed to take off in most the statesuntil 2004–05 and provides political economy insights on theMaharashtra success storyIndonesia: The analysis focuses on political economy constraintsthat have limited investment levels for urban sanitation andexamines the factors behind the recent increase in governmentinterest in sanitation service provision. While this increasedinterest has not yet translated into increased investment levels,it constitutes a major shift from the previous understanding(both within and outside government) that sanitation is a privatematter for households and not something for which thestate has responsibility or obligations.Senegal: The case study looks at the political economy risksand opportunities influencing investment in Dakar’s urbansanitation sector. Starting with the wide-ranging reforms ofthe water and sanitation sector in the mid-1990s the studyexplores the institutional environment, including the role of theinnovative contractual arrangements regulating the water andsanitation sector, as well as more recent World Bank/WSPsupportedinitiatives of onsite sanitation that for the first timeextend services to Dakar’s poor peri-urban areas.The terms of reference made a distinct differentiationbetween projects with positive experience (Brazil, India,and Senegal) and the Indonesia situation where politicaleconomy challenges had hindered increased investment.However, during the case study preparation it was clear thatthe context in Indonesia was rapidly changing, with increasedgovernment interest in and commitment to sanitation. Thisled to a change of focus from that initially envisaged, inwhich the cases studies generated lessons for Indonesia ondesigning actions that help manage the political economy ofsanitation. The new focus aimed at an examination of whythe current changes are occurring. This revised focus ensuredthat equally important lessons were captured from a contextof ongoing donor and lender efforts to encourage sanitationinvestment in the face of minimal initial government—andpublic—interest in sanitation.The case studies were conducted by a multidisciplinaryteam of international and national researchers. Internationalsocial scientist led the research process and was supportedby a national sanitation engineer. The Brazil case study teamincluded an additional international sanitation expert. Thecase studies were conducted as part of a research process thataimed to gain in-country stakeholder interest, buy-in, andsupport for the political economy analysis. This includedWorld Bank/WSP country offices, which—to varyingdegrees—were involved in the case studies, contributingto the identification of research hypotheses and providinginsights as key informants. Debriefing sessions or workshopsheld at the end of the fieldwork or following production ofinitial draft reports helped to validate findings and initiatedissemination.7 An anganwadi is a government-sponsored child-care and mother-care center.16Global Practice Team of Sanitation

III.Diagnostic findingsfrom the fieldIn this section the case study diagnostic findings are synthesizedand summarized with reference to the study hypotheses.The analysis is organized around the Diagnostic Frameworkpresented in figure 2.1. The discussion includes generalanalytical findings and notes and explains differences betweencountry case studies. Detailed summaries of the casestudies are presented in annex B.3.1 Country contextA country’s socioeconomic, political, cultural, and historicalcharacteristics, including its development trajectory and thecurrent development aid architecture, make up the countrycontext. An analysis of this context also involves looking atpolitical processes within the sanitation sector, the potentiallinks to national political institutions and stakeholders, theassumptions that underpin sanitation sector investment,and how and why sanitation investment was developed andby whom.Cultural and historical contextThe research confirmed that the cultural and historical contextis a significant determinant of sanitation investment. In eachcountry, contemporary attitudes and behavior toward sanitationinvestment could be explained at least in part by historicalfactors. Where an appropriate combination of historicalcultural norms and devolved political authority prevailed,these could be cultivated by progressive decision makers togenerate demand for sanitation among citizens. In contrast,where hierarchical political and social norms prevailed, theycreated a block to progress in sanitation investment.In India, for example, successful investment in sanitation inMaharashtra could be attributed to a long history of socialmovements led by local leaders supporting the liberationof oppressed castes. Senegal’s cultural and religious contextplaces a high importance on privacy. Combined with a rapidgrowth in urbanization, it created a demand for increasedwater and sanitation provision in urban areas, particularly inthe capital city, Dakar. This combination was reinforced 2000by the new political leadership under President Wade withslogans such as “Sanitation is a matter of dignity.” In sociallyand economically dynamic Brazil, persistence of sanitationproblems, although decreasing over time, remains a sourceof embarrassment, as sanitation (especially sanitary sewerage)is associated with modern society. From a political point ofview, since President Lula was elected, access to sanitationhas been linked to human dignity and a citizen’s right, similarto the case in Senegal.In contrast, sanitation investment in Indonesia has beenconstrained by a historical context of authoritarian rule, inwhich advocacy is difficult, and, crucially, a sociopoliticalview both within and outside of government that sanitationis a private responsibility. For cultural reasons, sanitation, interms of wastewater treatment and disposal, is also generallynot a subject that is discussed either widely or easily withinIndonesian society. The central government had not sought tochange the perception that sanitation was solely a householdmatter. Awareness of and concern about what happens towaste is low across all socioeconomic groups within Indonesiansociety. Public sanitation investment in urban areas ofIndonesia has been low over many decades, and the majorityof the existing investment has been by private householders,who generally expect little from government. These factorshave all had a significant, long-term effect on limiting publicpolicy debates and maintaining a low demand for facilitiesand services that effectively and safely treat and dispose ofwastewater among all sections of the population.www.wsp.org17

The Political Economy of SanitationDiagnostic findings from the fieldPolitical opportunism and investment promotionThere is evidence from across the cases studies that sanitationinvestment promotion can be motivated by politicalopportunism. This represents an encouraging shift, as itreflects a higher political visibility for sanitation investmentin some contexts. With the exception of Indonesia, there isincreasing cross-party awareness of—and consensus over—the importance of sanitation investment.In Brazil, political parties that obtain support from poorervoters certainly have a different attitude to sanitation, butthis is not necessarily associated with advocacy of differenttechnologies or investment decisions. The main politicaldispute in the Brazilian sanitation sector, not necessarilydefined in terms of the traditional “right” or “left,” concernsthe respective roles of local municipalities and the water andsanitation companies controlled by the state governments.The municipalistas emphasize the benefits of responsivenessand accountability associated with municipal control. Theestadualistas emphasize the management and investmentcapacity and economies of scale provided by state utilities.Increased sanitation investment has benefited from a growingcross-party consensus since President Lula’s decision toinclude it as a priority sector in the 2007 Growth AccelerationProgram (Programa de Aceleração do Crescimento, PAC).While Lula’s Workers’ Party (PT) is most clearly associatedin the minds of poorer voters with an emphasis on sanitationas an issue of dignity and citizenship, all parties benefitfrom the opportunities to make political capital out of largesewerage contracts.In Maharashtra, the behavioral change among national andlocal political leaders toward promoting and supportingsanitation investment indicates a consensus across parties.It has been stimulated in part by an understanding of thegrowing political importance among rural voters of sanitationinvestment. As a consequence, there is little evidence ofpartisan politics in sanitation investment debates.While there is no evidence that political considerations drivepro-poor sanitation investments in Senegal, highly visibleinvestments, with a corresponding emphasis on cultural orreligious importance, are made in Dakar and other areas,and this emphasis undoubtedly appeals to a large numberof voters.Global policy debate and external aid agenciesThe research looked at the facilitating role of external aidagencies and global policy debates for more pro-poor sanitationpolicies and investments. Global debates have impactedpositively on national sanitation strategies and investmentsin contexts where they strike a chord with the progress ofinternal debates. Where sanitation debates are externallyinitiated or seen to be ideologically imposed, claims thatexternal agencies have an impact are less convincing.It is important to note that in three of the four cases (India,Brazil, and Indonesia) the international financial institutions(IFIs) are, unusually, small players with a facilitativeor supportive role. The authors would argue that politicaleconomy analysis is even more important for IFIs and donorsin smaller countries where they have stronger influence anda more critical role and therefore need to be more aware ofthese dimensions.International attention to sanitation in Senegal via the 2004Global WASH Forum in Dakar kept water and sanitationhigh on the country’s agenda. This provided a platform fordonor support and a clear demonstration of national commitmentby the government, with President Wade himselfattending the conference.In Brazil, perceived enthusiasm by IFIs for privatization ofstate water and sanitation utilities in the 1990s contributedto a backlash against “neoliberal” policies in the sector thatsucceeded in derailing the privatization process. IFIs suchas the World Bank had more success with their support forhome-grown innovations such as the condominial approach, 8sponsoring conferences and other events that helped to spreadthese innovations and legitimize their uptake by utilities suchas EMBASA (the state company responsible for the successfulBahia Azul investment program in Salvador).8 Condominial systems refer to the process of implementing simplified sewerage service coupled with consultations and ongoing interactions between users and agencies duringplanning and implementation. The term is primarily used in Latin America, particularly in Brazil, and is derived from the term condominio (housing block).18Global Practice Team of Sanitation

The Political Economy of SanitationDiagnostic findings from the fieldIn Indonesia, external agency influence has clearly been important.Government interest has been stimulated through,among other factors, a WSP comparative study on the economicimpacts of sanitation, a WSP/US Agency for InternationalDevelopment regional workshop in the Philippines,and the Indonesia Sanitation Sector Development Project(ISSDP) implemented by the Government of Indonesiatogether with the Water and Sanitation Program–East Asiaand the Pacific (WSP-EAP) (and cofunded by the Governmentof the Netherlands). However, in the case of ISSDP,donors’ influence rests on their ability to understand andmanage effectively their relationship with government. Theconsultant team employed by WSP to work on ISSDP, forinstance, physically sits and interacts with government ona daily basis. While letting go of certain aspects of projectplanning, or accepting slower time frames, is not alwayscomfortable for IFIs and donors, in a context where thegovernment does not want to be seen in any way as donordriven, a back seat role is key to encouraging governmentownership and commitment.The water and sanitation sector in India is heavily funded bygovernment and strongly government led. The policy debateon the need for sanitation investment at the national levelhas been won and is government owned rather than beingexternally driven. The perceived urgency of this need is linkedto external engagement with IFIs and donors on MDGcommitments. At the state level in Maharashtra, WSP helpedsupport pro-poor sanitation investment by introducing stateand local government colleagues to promotional approachesand low-cost sanitation technologies. WSP then used the evidentsuccess of the Maharashtra program in advocacy at thenational level for a shift in emphasis in the Total SanitationCampaign from household inputs (toilet construction) tocollective outcomes (an end to open defecation). In 2004,significant changes were made to the Total Sanitation CampaignGuidelines to reflect this policy shift.3.2 Sector arenaBeyond the sanitation country context, a political economyperspective focuses attention on the sector arena, meaningthe formal and informal institutional arrangements for—andstakeholder interests in—the management and implementationof sanitation investments and service provision. Theliterature suggests that this political economy challenge canbe particularly problematic in the sanitation sector, withits need for cross-sectoral delivery and with a wide range ofdelivery strategies from which to choose. 9Institutional challenges and opportunitiesThe institutional complexity of the sanitation sector has longbeen recognized as a major obstacle to pro-poor sanitationinvestment. Despite this, the cases studies illustrate that opportunitiesfor institutional change have been recognized andsupported. These changes have demonstrated that institutionalcomplexity need not be a barrier to increased investmentand that Task Team Leaders and practitioners can work tosupport progressive change within complex landscapes, withdecentralization often providing more room for institutionalmaneuver. Despite political sensitivity and institutionalconstraints, there is still a space where pragmatic work canbe done to support institutional change without huge loans.This work can support formal rule changes, as with regulatoryreform in Senegal, or informal cultural change, as illustratedby institutional support in Maharashtra.The research confirms the constraints that arise from a lackof a clear organizational home for sanitation investment.This lack of a home can add to the complexity of sectorplanning and resource allocation processes while limitingorganizational accountability for progress. In Indonesia, forexample, there is no single national level ministry responsiblefor sanitation policy; responsibilities are shared among atleast five ministries. It is clear that urban sanitation has nodistinct organizational home, and so unsurprisingly thereare historically and currently varying degrees of interest insanitation. In Senegal, in contrast, there was a consensusamong key informants that the National Sanitation Office(ONAS) was increasingly taking responsibility for urbansanitation policy and investment. One went as far as to saythat “ONAS is the real ‘Ministry of Sanitation.’” 10 Figure3.2, from the Senegal report, maps institutional delivery ofsanitation investment.9 For a review of available literature, see OPM 2009b.10 Under recent public administration reform, sanitation had been bundled together with other sectors into a single ministry (the Ministry of Urban Affairs, Housing, Water andSanitation).www.wsp.org19

The Political Economy of SanitationDiagnostic findings from the fieldFIGURE 3.1 INSTITUTIONAL LANDSCAPE OF URBAN SANITATION INSENEGAL (SPECIFIC FOCUS ON DAKAR)Policy and strategyMinistry of UrbanAffairs, Housing,Water and SanitationSanitation DirectorateUrbansanitationLocalGovernmentplans on waterand sanitationRuralsanitationIn Dakar (andother urban centres)this does not exist(more a reality inremote ruralareas)ReportingPilot-site Dakar (PADPUQ/GPOBA)OperationsOnsitesanitation(cell)De facto ONAS plays a biggerpart in policy making than theformal organisation suggestsONASNational Sanitation OfficeSewerage/network(service)BILLINGSDENotes: AGETIP: Agence d’Exécution des Travaux d’Intérêt Public (public works and employment agency)SDE: Sénégalaise des Eaux (Senegalese water utility)Source: Garbarino and Guène 2009.CONTRACTNGOs,CBOsINFORMATION‘CREATING DEMAND’CONTRACTAGETIPCONTRACTPrivatesectorCONSTRUCTIONPrivate households,beneficiariesThe research findings emphasize theimportant status of decentralizationas a key determinant of the patternand impact of sanitation investments.With the exception of Senegal, wheresanitation is not decentralized, 11 thecase studies highlighted several facetsof centralization/decentralization.On the demand side, the strength ofdecentralized authority can empowerstakeholders to debate and contestsanitation investment with which theyare dissatisfied. Decentralized budgetaryauthority can encourage pressurefrom regional government, civil society,and citizens to allocate budget tosanitation investment. On the supplyside decentralization can keep politiciansand bureaucrats in touch withtheir grassroots constituents. In allcases, the positive influence of decentralizationon sanitation investment isconditional upon the level of awarenessand strength of demand amongbudget holders and citizens. Whilein some cases, as in Maharashtra andin Brazil, decentralization can proveto be hugely significant in promotinginstitutional arrangements thatfacilitate more effective cross-sectoral11 In Senegal, local governments are tasked to develop local water and sanitation plans. However, a combination of capacity constraints at the local level and weak accountabilitybetween central and local government means that this hardly ever happens in practice. Remote rural areas are sometimes forced to take responsibility for their own sanitationservices, as their needs are more easily ignored by the central Government in Dakar.20Global Practice Team of Sanitation

The Political Economy of SanitationDiagnostic findings from the fielddecision making at the subnational level, in other cases, suchas in Indonesia, a lack of clarity over institutional authorityat the national level can be reproduced and magnified atsubnational level.Decentralization is long established in Maharashtra, andsome senior political leaders and officers have worked theirway up though the hierarchy, bringing with them an understandingof, and commitment to, village-level action. Somemaintain close links with their village. Indeed so strong wasthe decentralized nature of sanitation investment innovationin Maharashtra that the national program borrowed fromthe incentive program initiated at the local level ratherthan the other way around. Also in Maharashtra, a rangeof social sector departments and programs including preschoolcenters, education, health, and sanitation fall underthe district council (Zilla Parishad) chief executive officer.This makes it easier to secure cross-sectoral bureaucraticsupport for development programs and to maintain goodcoordination between the bodies concerned.In Brazil, the federal government—which sets nationalsector guidelines and serves as the principal source ofsanitation investment funds, whether through grants orloans—functions more as a dynamic arena for strugglesbetween different stakeholders than as a stakeholder in itsown right. For example, the military regime from 1964 to1985 used the resources of an authoritarian and highly centralizedstate to push through national strategies such as theNational Water Supply and Sanitation Plan (PLANASA).In contrast, today’s democratic, pluralist, and highly decentralizedBrazil forces national policy making to respondto competing pressures from promunicipal municipalistas,prostate utility estadualistas, and pro–private sector privatistas.These advocates mobilize support across different levelsof government and from different parts of political society,civil society, and the private sector and can form tacticalalliances around points of ideological convergence. Figure3.3 illustrates these competing pressures.Figure 3.2 Sanitation sector stakeholders’ideological positions, BrazilPublic sectoroperationMunicipal publicsector operationState-level public sector operationmunicipalistasestadualistasFederalGovermentLocal-level operationprivatistasCommerial operationon capitalist linesPrivate-sectoroperationSource: Cunha et al. 2006, our translation (graphic provided by andreproduced by permission of Frederico Turolla)The case study of the Bahia Azul investment program showedthat in the 1990s it was possible for a state government torapidly scale up sewerage provision with a go-it-alone approach.But with this approach came missed opportunitiesfor cross-sectoral work, including synergy with advocatesfor the upgrading of health and neighborhood services bythe municipal administration authority. In today’s sectorarena this approach would no longer be possible, given thestrengthened role of the municipalities and the need for improvedfederal cooperation between states and municipalitiesunder the 2007 Basic Sanitation Law, which also covers watersupply. Sanitation investments under the flagship GrowthAcceleration Program (PAC) include a much greater focuson collaboration between state and municipal governmentdepartments, though some cross-sector coordination issuesremain. Stakeholder power and interest mapping (figure 3.4)clearly shows how political economy factors made it impossiblefor one side to prevail in the struggle over the 2007law. Using information gathered through key informantinterviews, a graphical presentation of stakeholder interestsand power relations places stakeholders on a matrix; eachstakeholder’s position is determined by its interest (x-axis)and its ability to influence decision making (y-axis).www.wsp.org21

The Political Economy of SanitationDiagnostic findings from the fieldFigure 3.3 Stakeholders, interests, and power in negotiations over provisions in the “SanitationLaw” to strengthen the role of municipalitiesHigh82A916B43Power105C7D11LowSupport Neutral OppositionInterestStakeholderInterestsStakeholderInterestsStakeholderInterests123President’s officeSecretaria Nacionalde SaneamentAmbiental (NationalSecretariat forEnvironmentalSanitation, SNSA),a department of theMinistry of Citiescontrolled by PT(Workers’ Party)until 2005Fundação Nacionalde Saúde (NationalHealth Foundation,FUNASA),executive agencyof the Ministry ofHealth controlledby BrazilianDemocraticMovement Party(PMDB)Guarantee legal andpolicy framework tofacilitate increasedinvestments insanitation, balancingdemands fromdifferent politicalgroupsEstablish controlof legal andpolicy framework;strengthen role ofmunicipalitiesAvoid centralizationof policy controlby SNSA;increase scopefor negotiatingsanitationinvestments in smallmunicipalities4567Associação dasEmpresas deSaneamentoBásico Estaduais(Association ofState SanitationCompanies, AESEBE)Associação Nacionaldos ServiçosMunicipais deSaneamento (NationalAssociation ofMunicipal SanitationServices, ASSEMAE)Associação Brasileirade Infra-Estruturae Indústrias deBase (BrazilianInfrastructure andHeavy IndustryAssociation, ABDIB)Associação Brasileiradas ConcessiónariasPrivadas dos ServiçosPúblicos de Águae Esgoto, (BrazilianAssociation of PrivateWater and SanitationOperators, ABCON)Orient legal, policy,and resourceallocation frameworkto strengthen role ofstate utilitiesOrient legal, policyand resourceallocation frameworkto strengthen role ofmunicipalitiesIncreased investmentin sanitationOrient legal, policy,and resourceallocation frameworkto strengthenrole of private-sectorconcessions891011Partido dosTrabalhadores(Workers’ Party,PT), lead party ingoverning coalitionPartido do MovimentoDemocráticoBrasileiro (BrazilianDemocraticMovement Party,PMDB), largest partyin PT-led coalitionPartido da SocialDemocracia Brasileira(Brazilian SocialDemocracy Party,PSDB), lead party inopposition coalitionPartido da Frente Liberal(Liberal FrontParty, PFL—changedname to DEM or Democratsin 2007), partof opposition coalitionOrient legal, policy,and resourceallocation frame-workto strengthen roleof municipalities,promote citizenoversight, andrestrict private-sectorparticipationGuarantee flow ofsanitation resourcesto supporters in bothstate governmentsand municipalities,including via FUNASAOrient legal, policy,and resourceallocation frameworkto strengthen role ofstate utilities, promotetechnical regulation,and boost privatesectorparticipationOrient legal, policy,and resourceallocation frameworkto boost privatesectorparticipationSource: Shankland et al. 2010.22Global Practice Team of Sanitation

The Political Economy of SanitationDiagnostic findings from the fieldIn Indonesia, rapid decentralization gave greater administrativeindependence to local governments and moved financialresources and responsibility for the provision of manypublic services (including water and sanitation) directly tothe district level. However, the effects of the lack of clearresponsibilities at national level are compounded by a lackof clarity over the roles of different levels of local governmentand of different institutions within local governments. Furthermore,responsibilities of local agencies may vary betweendifferent districts and cities as there is no national policy oninstitutional configuration or allocation of responsibilities forsanitation between local bodies at the local level. figure 3.5presents an institutional map of Indonesia’s urban sanitationsector and clearly highlights the lack of clarity over responsibility.This reduces accountability for sanitation service delivery.It is unclear to ordinary members of the public whomthey could approach and/or complain to. This contrasts toelectricity suppliers, for instance, where advertised hotlinenumbers enable clients to contact providers directly whenthere is a problem.A further key issue faced due to decentralization in Indonesiais the increasing practice of redistricting, through which localpoliticians can petition for districts to be split into smalleradministrative units through a mechanism called pemekaran.In theory this should facilitate better service delivery, moreequitable resource distribution, and more representative government.While redistricting has increased revenues, localbudget generally give priority to free education, (curative)health services, and the construction of new government officesto house newly formed local administrations. These easilycrowd out sanitation and other public health promotion issues.This bottom-rung perception of sanitation is entrenched byan attitude among mst local governments that responsibilityfor sanitation rests with others: NGOs, the private sector, or,despite decentralization, the national government, and mostimportantly perhaps, with individual households.Figure 3.4 Institutional map of the urban sanitation sector, IndonesiaInfrastructure development and service deliveryLocal government departmentsBappedaMunicipal Department of Public Works (PU) X XMunicipal Cleaning and Landscaping Agency (DKP) X XNeighborhood administrative units (RT/RW) X XEnvironmental Services Agency (DLH) X X XEnvironment Watch Body (BPLHD) at provincial levelWater Resource Body (Dinas Sumberdaya Air)***Local government enterprisesPDPAL (sewerage utilities)* X XPDAM (water utilities)* X XNongovernment stakeholdersPrivate enterprisesLocalpolicy andstrategyNGOs / CBOs / community groups X XIndividuals / households X XNotes:* Depends on district / city arrangements (only two cities have PDPAL separated from PDAM—Jakarta and Banjarmasin).** Pit emptying.*** Can take the role of managing septic tanks operators.**** As with sanitation, organizational responsibility for drainage is complex and depends largely on the grade of roads and associated drains. The Ministry of Public Works is responsiblefor drainage on first- and second-level roads (interprovince and intercity roads). Tertiary roads and local streets are often under local government responsibility but neighborhood streets areoften neglected. Developers build drainage systems for new housing estates and formal developments, but drainage in informally growing settlements is often unaddressed.Sources: WSP-EAP 2009; Brook et al. 2010.XXSewerage andwastewatertreatmentSludgetreatmentX**CommunaltoiletsSANIMAS(urbancommunitysanitationsystem)Householdtoilets andseptic tanksXDrainage****www.wsp.org23

The Political Economy of SanitationDiagnostic findings from the fieldBudget allocations and disbursementsThe research focused on the political economy factors thatmight explain the gap between sanitation as an expressedpriority and actual changes in budget allocation and disbursement.The challenge of translating political statementsinto budget commitments was confirmed. In some cases thisis a function of the pressure to allocate scarce resources tosectors with a traditionally higher perceived priority or withhigher perceived political rewards. In cases where resourcescarcity is less of an issue, the importance of organizationalresistance from within the executive can become apparent.In these cases, executive ministries, departments, andagencies have insufficient pressure from above and frombelow to allocate budgets to (more progressive) sanitationinvestment. Therefore, even where there is high-level buyin,and demand generated within civil society, this will notnecessarily change political preferences within institutionsimplementing government policy. Another explanation forthe funding gap is seen where implementing agencies lackthe technical and governance capacity to absorb and manageincreased budget allocations. Where governments havesuccessfully bridged these policy-to-funding gaps, nationalor federal level sanitation programs can provide a protectedinstitutional vehicle for sanitation investment.In Indonesia there has often been a huge gap between publicstatements and budget execution levels. This is less a functionof resource scarcity and more a matter of organizational resistanceor lack of real interest within government. Despitecertain formal processes being in place, informal patron–client relationships play a key role in determining investmentpriorities and funding from central to local governments.This is particularly evident in the influence of provincial levelgovernment stakeholders and actors over budget allocations,where personal relationships and political considerations arekey to obtaining funding.In contrast, these political economy gaps have been largelybridged at the federal level in India, with the governmentputting in place a transparent institutional mechanism ofdisbursement and authority that ensures the transfer ofgovernment investment into various elements of the nationalTotal Sanitation Campaign. At the subnational level inMaharashtra, the ability of the Maharashtra governmentto secure strong and sustained bureaucratic support for itspolitical commitments was fundamental to the progress ofsanitation investment in the state.In Senegal, budget allocation has been hampered by capacityconstraints at the policy and planning level as well as by competinginvestment priorities with potentially greater politicalrewards, such as investments in Dakar’s road network. Anorganizational mapping, undertaken during the fieldwork,identified key decision and political economy entry pointsduring the budget process, including the president’s abilityto influence the budget process or the importance of lineministries’ capacity to present a sound budget proposal to theMinistry of Finance. figure 3.6 summarizes this analysis and isdivided into three parts: the formal rules of the budget process(in the center), key points of decision making (in blue, onthe left), and a description of the informal processes (circledin red, on the right). Moreover, cost recovery is subject tomuch debate in Senegal’s urban sanitation sector today. Withlittle actual contribution from local government, ONAS getsits main revenue from the sanitation surcharge collectedwithin the water billing. In August 2008 ONAS signed aperformance contract with the government confirming thatthe state would cover the financing gap if ONAS performedsatisfactorily. 12 The sanitation sector has therefore followedthe successful example of the water sector in designing contractsthat shape stakeholders’ incentives in order to protectinvestments from adverse political economy impacts.12 ONAS’s performance was tracked in wastewater treatment, investment in the network (extension and rehabilitation), new connections and new onsite facilities, networkmaintenance, and financial management.24Global Practice Team of Sanitation

The Political Economy of SanitationDiagnostic findings from the fieldFIGURE 3.5 ORGANIZATIONAL MAPPING OF THE BUDGET PROCESS FOR URBAN SANITATION IN SENEGALKEY POINTS OF DECISION-MAKINGAND PE ENTRY POINTSDepartment capacityto prepare sound budgetproposal according to sector policyFORMAL PROCESSMoF publishes budget envelopesBudget proposal & preparation inMinistry’s Sanitation DepartmentINFORMAL PROCESSBudget envelopes are notpublished by MoF and lineministries make proposal ‘into the blue’Submission of department budgets‘NEGOTIATION’at intra-Ministry-level‘Ministère de l’Urbanisme, de l’Habitat, del’Hydraulique Urbaine et de l’Assainissement’prepares budget proposalSubmission of ministry budgets to MoFPresident influences all stagesof the budget processMoF influenceto reduce line ministries’ budget proposalsMoF validates proposal according to sector policyand makes adjustments (usually cuts)‘NEGOTIATION’at inter-Ministry-levelPrime Minister & Council of MinistersParliamentary approval processDe-facto no changes at Parliament-levelSource: Garbarino and Guène (2009).In Brazil there is a significant gap between the amountsearmarked for sanitation investment in congressionalbudgets and those actually released by the national treasury,with political as well as financial criteria governingthe ultimate decisions on disbursements. Most sectorinvestment has historically derived from federal governmentloans, with strict technical and financial viabilitycriteria that limit uptake to the larger and better-run stateutilities. The inclusion of sanitation in the Growth Ac-celeration Program has, however, significantly increasedthe availability of grant finance for investment by smallerand more heavily indebted utilities in poorer states andmunicipalities. figure 3.7 graphically represents the mix ofloans and grants with different institutional and politicalpathways to decision and disbursement. (Where relevant,sites or moments of political input to decision making arenoted in red alongside the official technical and financialdecision pathways.)www.wsp.org25

The Political Economy of SanitationDiagnostic findings from the fieldFigure 3.6 Budget decisions and resource flows forsanitation investment grants and loans in BrazilPUBLIC SECTOR FINANCING FLOWFROM FEDERAL TO STATE/MUNICIPAL LEVELS1. GRANTSParliamentary EarmarksMayor/GovernorPAC call for proposalsMayor/GovernorDeputy/SenatorCAIXAMinistryof CitiesSelectprojectsbased ontechnicalcriteriaNationalBudgetMayor/GovernorPACManagementCommitteeSecond selectionbased on regionaldistributiveconcernsDecisions based onpolitical negotiationsPresident´sofficeMinistry ofFinanceCAIXAPUBLIC SECTOR FINANCING FLOWFROM FEDERAL OR IFI TO STATE/MUNICIPAL LEVELS2. LOANSPAC call for proposal (national or regional scope)IFI lendingMayor/GovernorStateCompanyFed. GovprogramMayors/Governors/StateCompaniesMinistry ofCitiesSelect projectsbased ontechnical criteriaCAIXAIFIIFIConsultationletterTreasuryChecks level ofindebtednessFed. GovPACManagementCommitteeCOFIEX(Finance Ministry)CAIXASecond selectionbased on regionaldistributive concernsCAIXASenateGive instructionsto release or retainthe money basedon politicalnegotiationsRelease or retainsthe money basedon budget/cashflow criteriaDecisions basedon economic /financial criteriaBNDESCAIXAMayors/GovernorsTreasuryCAIXA = Caixa Econômica Federal (Federal Savings Bank); BNDES = Banco Nacional de DesenvolvimentoEconômico e Social (National Bank for Economic and Social Development); COFIEX = Comissão deFinanciamentos Externos (Brazil’s federal government external financing commission).Source: Shankland et al. 2010.The key constraint to increasing boththe quantity and the quality of sanitationinvestment in Brazil is now perceivedto be weak technical and financialcapacity resulting from the decadeslongneglect of the sector. While theprivate sector is already beginning torespond to the new, more positive scenario,significant investments continueto be needed in the technical and managementcapacity of the public bodies(at federal, state, and municipal levels)that commission, monitor, regulate,and in most cases operate sewerage andother sanitation services.Corruption and rent seekingA particular dimension to the budgetallocation and disbursement debate isthe incidence of corrupt practices basedon rent-seeking behavior within organizationswith control over budgets andauthority over sanitation investmentdecisions. While all case studies cameacross evidence of rent seeking andcorruption, it was not identified as thepredominant feature distorting propoorsanitation investments.In Indonesia sanitation investmentswere said to be less popular with manycivil servants than other types of largerinfrastructure projects (for example,roads and buildings), as they providedfewer opportunities for corruption. Onesenior civil servant argued, “If you gointo sanitation, you are signing up tobe poor.” There are, however, corruptpractices in sanitation investment:private sector interviewees involved inbuilding sanitation infrastructure in thepast explained that they were usuallyasked for kickbacks of up to 20 percentof the total budget. Corruption is a26Global Practice Team of Sanitation

The Political Economy of SanitationDiagnostic findings from the fieldwidely and often discussed topic within the national media,and there is a general public perception that someone alwaysgets rich with infrastructure investment.Another opportunity for rent seeking is created in Indonesiathrough the ongoing decentralization process. The practice ofsplitting districts into smaller administrative units should intheory facilitate better service delivery, more equitable resourcedistribution, and more representative government. However,as decentralization means more central funding is available,and more money is also raised locally through taxation, a keymotivation for splitting districts has often been control overresources and rent-seeking opportunities for local elites.Within the low technology investment arena in rural sanitationin India, opportunities for corruption prevail inthe disbursement of a large central budget under the TotalSanitation Campaign and for rent seeking in the approval offinancial awards for clean village status. This study, with itsrelatively brief period of fieldwork, did not elicit evidence ofcorruption in the disbursement of TSC budgets from centralto subnational administration. Nor was there any evidence ofrent seeking by officials responsible for confirming clean villagestatus in Maharashtra. While it is reasonably safe to assumethat corruption and rent seeking play their part in this sector,as they do in others, the fieldwork team did not conclude thatthis distorted the process and its outcomes significantly.In Senegal, the fieldwork team did not come across concreteevidence for corrupt practices within the onsite investments.Works are closely monitored through the Global Partnershipon Output-Based Aid (GPOBA) initiative. However,the overall preference of politicians for big infrastructureinvestments—while on one hand explained by a technologicalbias—is likely to be influenced by the opportunities createdfor rent seeking.In Brazil the political commitment to condominial investmenthas been pro-poor while generally maintaining the appeal fordifferent stakeholders. For politicians, this creates relatively bigpublic works programs for investment, and key informants inBahia raised the issue of the closeness of the state government toparticular construction companies. Moreover, according to keyinformants, there are expectations by construction companieswho finance politicians’ election campaigns that they will berepaid out of inflated contracts when that particular politicianis successfully elected. While not covered in the case study(as it is not funded by World Bank or WSP), FUNASA, theMinistry of Health agency responsible for small-town sanitation,has been involved in numerous corruption scandals, andits former administrative director was arrested by the FederalPolice on suspicion of embezzling roughly US$30 million inspring 2010.Technological choice and pro-poor sanitation provisionThe research explored whether and why decisions about propoorsanitation investment can also be derailed by technologicalpreferences. Politically driven decision making was characterizedby a preference for highly visible, big infrastructureinvestments, with in some instances rent-seeking opportunitiesbeing an important incentive for those in power. Amongengineers, there is a strong technical bias for traditional sanitationinvestments, such as sewerage-based service provision,often at the expense of appropriate technological choices. Thesector arena is therefore often characterized by political andtechnological preferences that benefit the minority of well-offurban residents rather than the poor majority.In cases where technological and political preferences are notthe same, an interesting debate emerges between sector stakeholders.In Senegal, many high-ranking politicians are supportersof investing in the expansion of the sewerage networkand costly treatment plants, whereas many technical sectorspecialists and bureaucrats have been increasingly convincedby examples of onsite sanitation and condominial systems thatsuccessfully work in poor semi-urban areas of Dakar. Anecdotalevidence suggests that this experience echoes the situation inmany other countries. However, bureaucrats in Senegal havelimited power compared to politicians. This lack of influenceover technological discussions by engineers and bureaucratshas limited the adoption of large-scale onsite sanitation andcondominial systems and has undermined efforts to expandsanitation provision to the country’s poor outside the reachof the network.In Brazil, a discourse of modernity shared by popular andelite actors has favored investment in “modern” sewerage overother forms of sanitation provision. Moreover, the engineer-www.wsp.org27

The Political Economy of SanitationDiagnostic findings from the fielding community has initially resisted the condominial sewerstechnology; it was simply not what they have been trained in.However, the resulting high costs of increased sanitation accessand the bias away from pro-poor investment have been partiallyoffset by the use of innovative low-cost sewerage technologiessuch as the condominial approach.In India, the federal government has ensured that affordabilityof rural sanitation technologies has not hindered the deliveryof sanitation investment. Subsidies for household latrines fordesignated (below poverty line) poor households are readilyavailable through the federal Total Sanitation Campaign. InMaharashtra these subsidies resolved affordability problemsfor many households, which was confirmed by observablebehavioral change and by below poverty line householdsinterviewed for this study.In Indonesia, private investment is the norm in a contextwhere sanitation is widely seen as a private and not a publicresponsibility. The traditionally low political interest in sanitationmeans that there is little or no prominent discussionon technological choice among political decision makers.Between 1970 and 2000, government spending on sanitationaveraged just Rp 200 (US$0.021) per person per year. It isnot surprising then that the primary source of investment forsanitation is households and communities, who invest in onsitesanitation. In the city of Jakarta, for instance, this results inself-provisioned investments in septic tanks by households,while in rural areas, pit latrines are the most popular technologicalchoice.Private sector involvementThe research tested the hypothesis that governments activelyencourage nongovernmental and private sector actors insanitation infrastructure and delivery, with a focus on howthat relationship can be established in a way that effectivelymanages political economy risks and opportunities. The researchconfirmed the potential institutional effectiveness ofcontractual relationships that provide flexible entry for theprivate sector and NGOs in sanitation promotion, investment,and delivery.In India, the Total Sanitation Campaign has been designedto be sufficiently flexible to allow for subnational autonomyand to encourage the participation of NGOs and the privatesector in the implementation of crucial elements of theprogram. In Maharashtra, however, sanitation promotion isundertaken by government officers, not contracted to externalorganizations. This adds legitimacy to the promotionalcampaign. NGOs are involved, but in the background, asresource centers for government. Similarly, in Senegal, theWorld Bank/WSP Sanitation Program for Peri-urban Communitiesof Dakar (PAQPUD) delegate the active role ofpromoter and implementer to community-based organizationsand private operators, which are trusted partners inmany communities.In Brazil, both service provision and sector investmentfinance are dominated by the public sector. However, theproportion of sewerage services provided by private-sectorconcession holders is growing, albeit from a very low base.Private investment in the sector suffered from long-standinguncertainty over the legal and regulatory framework, partiallyresolved by the 2007 National Basic Sanitation GuidelinesLaw, which also includes water supply as part of basicsanitation. Evidence from Brazil has also highlighted thatlong-term engagement with communities matters. The casestudy of the Bahia Azul program showed that the hard workof the community mobilizers in organizing neighborhoodmeetings and pursuing individual households to ensure theiradherence was very successful in creating the condominiumsand paving the way for investment and construction.However, the lack of any systematic links with communityassociations and other neighborhood groups may havemade it harder to mobilize subsequent collective action foroperation and maintenance in a sustainable fashion.In Indonesia, where recently increasing political commitmenthas not yet translated into concrete actions, there is currentlylittle role for private sector involvement in the sanitation sector.Not actively encouraged by the government, the private sectoris, however, involved through private investment in onsite facilitiesor maintenance, for example, in those cases where septictanks are operational and emptied on a regular basis.Demand for sanitation services and willingness to payThe research considered whether communities and householdsare less interested in sanitation investment than in other28Global Practice Team of Sanitation

The Political Economy of SanitationDiagnostic findings from the fieldservices and are less willing to pay for sanitation services. Itis evident that while demand for sanitation has traditionallybeen weaker than for water and other services, demand inboth urban and rural areas can be generated with a selectionof rewards and sanctions, an affordable mix of technologies,and a long-term strategy of engagement and promotion.In Maharashtra the demand for water is much stronger thanthat for sanitation. It is also highly significant, however,that under the state’s Sant Gadge Baba scheme, communityinvestments have been much larger than governmentexpenditure due to a careful combination of incentives andsanctions. Indeed, the experience in Maharashtra has demonstratedthat in this context, rewards for sanitation outcomesare a key motivating factor for communities. Interest in anddemand for sanitation in Indonesia has traditionally beenlow among communities, and stakeholder analysis confirmedlow interest among the media, consumer groups, and withinhouseholds.Rapid urbanization and population growth have put pressureon service provision in Senegal’s cities. In most settings,however, community demand for services focuses on whatare perceived as more urgent problems: drinking water, solidwaste collection, wastewater and drainage (in particular inthe rainy season), or acute environmental problems as thecase of the Cambérène treatment plant demonstrates (box3.1). However, in Dakar, NGOs and CBOs have successfullyused community interest in better drainage and wastewatercollection to stimulate demand for sanitation services. Byoffering a wide range of technological options 13 (in differentprice categories) supported by a one-off subsidy, sanitationprovision is becoming more affordable.In Brazil, demand for sewerage investments in high-densityurban informal settlements (favelas) has historically beendriven not by favela residents themselves but by downstreammiddle-class and elite communities. In the case study city ofSalvador, a particular factor was these communities’ concernabout the discharge of raw sewage onto “their” beaches. Thereis evidence, however, that near-universal access to electricityand water supply has made room for sanitation to moveup the list of poor Brazilians’ priority demands. Sewerageinvestment in informal settlements is now perceived as a keypart of the transition from favela (slum) to bairro (neighborhood)and from social exclusion to cidadania (citizenship).The benefits of improved sanitation for both human healthand dignity are now clearly present in the discourse of favelaresidents, as well as in high-profile statements by PresidentLula.Box 3.1 Consumer action: The Cambérène treatmentplant in DakarFrom December 2001 to March 2002, the Cambérène wastewatertreatment plant had problems with the pipe thatdischarged treated wastewater into the Atlantic Ocean. Thepipe was broken, and treated wastewater was discharged intothe sea directly on the shore instead of 200 meters from thecoast as intended. It further came to light that the NationalSanitation Office proceeded to pass raw sewage directly tothe sea during maintenance periods at the plant.Once people living nearby understood what was happening(and what caused the smell), they decided to physically blockand clog the last manhole leading to the shore. This did notleave ONAS any choice but to stop pumping raw sewage intothe sea, and the Cambérène treatment plant was eventuallyclosed down for four months.Following this concrete consumer action, ONAS was forcedto install a new, flexible pipe with an outlet 200 meters fromthe shore. In addition, the minister responsible for sanitationhad to personally negotiate with the community before themanhole was unblockedSource: Garbarino and Guène 2009.Sanitation as vote winner or career maker?The research also looked at the incentives and interests ofgovernment stakeholders in relation to sanitation investment,testing the hypothesis that within government, sanitation isperceived as a vote winner (or career maker). There was encouragingevidence from the India and Brazil case studies ofperceived political returns to sanitation investment, and someprogress apparent at the city level in Indonesia in generatingpolitical incentives through the Indonesian Sanitation SectorDevelopment Program. The political incentives operate13 The available technology includes wash basins or showers with a «soak away,» which do not count under the MDG target or the «safe management of human excreta» (thedefinition of sanitation in the terms of reference for this study).www.wsp.org29

The Political Economy of SanitationDiagnostic findings from the fieldwhere demand among the public has been generated orstrengthened and/or where there is a higher visibility givento sanitation in national and international policy debates.In Maharashtra, the political returns to sanitation investmenthave become increasingly apparent. Some of thesenior officials committed to sanitation in the early yearshave risen to more senior positions, albeit often to unrelatedsectors, and the government recognizes and rewardsofficers who perform well in the sanitation program. Significantly,this form of political incentive has started tobe reflected in other states. The program also gives GramPanchayat (village-level government) leaders greater accessto senior decision makers, raising their public profile if theyare sanitation supporters. This is clearly illustrated in thecountry case study stakeholder analysis (figure 3.8), whichmaps stakeholders according to their level of interest (on thehorizontal x-axis) and influence (on the vertical y-axis). Thisshows high levels of support for rural sanitation investmentamong powerful state and district officials. In Maharashtra,stakeholder positions on sanitation investment have shiftedover time to the point where there is now no significant stakeholderopposition to rural sanitation investment (illustratedby the blank cells B and D). Fifteen or more years ago thistype of stakeholder analysis would have shown active stakeholderopposition, in particular from the state water board.The challenge now is not one of active opposition but ofagenda setting and prioritization in a resource-competitiveenvironment. In this environment, the strongest push forsanitation investment and creative programming has comefrom sanitation champions—state politicians and executiveofficials—within the Department of Drinking Water Supplyand Sanitation, backed by supportive activities from thedonor community.30Global Practice Team of Sanitation

The Political Economy of SanitationDiagnostic findings from the fieldFigure 3.7 Power/interest matrix, rural sanitation investment, Maharashtra, IndiaHighInfluence25 2426 1 24 512 368A716 1119 917 1329 14 1027 2821C20 15182223BDLow30Support Neutral OppositionInterestGOVERNMENT AND STATE AGENCIESNational1 Ministry of Rural Development - (A: Support +high influence)2 Department of Drinking Water Supply (DDWS)(A: Support +high influence)3 The Rajiv Gandhi National Drinking Water Mission(A: Support +high influence)State level4 State Minister for Drinking Water Supply andSanitation(A: Support +high influence)5 State Water and Sanitation Mission (headed byChief Secretaryof State) (A: Ability to influencehigh but neutral interest)6 Water Supply and Sanitation Department(WSSD)*A: Support +high influence)District level7 Zilla Panchayat(A: Support +high influence; influence could bevaried depending on the individual capacity ofthe Sarpanch)8 District Water and Sanitation ManagementCommittee (DWSMC)(A: Support +high influence)9 District Core Team/ TSC Cell - (A: Support +high influence;however, influence will be more toward neutralbecause of relatively little decision-making power)10 Officials of district-level units of the Departments ofEducation (district education officer), Health (chiefmedical officer), Women and Child Development(chief district project officer-integrated child developmentschemes); (C: support and influence both moretoward neutral, as these have no authority over funds)11 District heads of ongoing water supply projects ofJalswaraj/ KfW/ Mahajal - (A: Support + influence)12 MPs and MLAs - (A: Support + influence)Block level13 Janpad Panchayat - (A: Support + influence)14 Block development officer - (C: support and influenceboth more neutral)15 Officials of various governmentdepartments/agencies like education, health, andwomen and child development - (C: support andinfluence more neutral)Village level16 Gram Panchayat (GP): Sarpanch and elected wardmembers - (A: Support + influence)17 VWSC members - (A: Support + influence)18 School Management Committee /PTA(C: support and influence more neutral)19 Gram Panchayat secretary - (A: Support + influence)20 Other GP level functionaries like ANM, Anganwadiworker(C: support and influence more towards neutral)PRIVATE SECTOR21 Rural sanitary marts (community-based product salecenters ) - (C: High support + low influence)22 Sanitary product suppliers (C: support and influencemore toward neutral)23 Local Masons - (C: support and influence moretoward neutral)DONORS24 World Bank (Jalswaraj Program) - (A: Support +highinfluence)25 WSP - (A: Support +high influence)26 UNICEF - (A: Support +high influence)CIVIL SOCIETY27 NGOs (capacity building/ KRC)(C: High support +low influence)28 Consultants** (as key resource centers)(C: High support +low influence)29 Media - (C: Significant support + influence)30 Village residents - (C: neutral or supportive with lowinfluence)Notes:* In other states the nodal agency could be the Rural Development Department, The Panchayat Raj Department, or the Public Health Engineering Department.** Technical consultants could go under the private sector category as profit-making stakeholders.Source: Colin et al. 2009.www.wsp.org31

The Political Economy of SanitationDiagnostic findings from the fieldIn Senegal, in contrast to the Maharashtra case, politicalincentives for supporting sanitation investment were low.While the political leadership with broad popular supportfor President Wade’s Sopi (change) coalition decided to makeinfrastructure including sanitation one of the government’spriorities, after the 2000 elections priorities seemed to beshifting with the government’s decreasing popularity. Politiciansnotably emphasized other sectors in the local electionsof 2009 (which took place during the fieldwork for the casestudy). The challenge of improving Dakar’s strained road networkwas clearly believed to be the number one vote winnerby President Wade’s Sopi coalition (see figure 3.9).Figure 3.8 Election poster in Senegal’slocal elections 2009In Indonesia, in a context of low political prioritization ofsanitation, progress has been made at the city level to createpolitical incentives for support to sanitation. The ISSDPstarted a process of bringing together six cities to show anddiscuss what each had done and achieved. This process tookon a dynamic of its own, and there is increasing friendlycompetition among the cities to perform well against eachother. In one case, a mayor was embarrassed at the low levelof achievement compared to the others, so he immediatelyinstructed his local administration to address the issues. Insome cities, sanitation is becoming a political electoral issue,with potential positive impacts on accountability-driven investment.In Payakumbuh, for instance, the mayor is knownas the “sanitation mayor” and sanitation investment has beena campaign issue.3.3 Sector processThe sector process in this context refers to the dynamic andongoing process of negotiation, bargaining, and identificationof political economy risks and opportunities by governmentand development agency stakeholders.Source: Photograph by authors.Civil society participation and citizen oversightThe study examined the extent to which the promotion anduse of civil society participation as an element of the sanitationsector strategy are key factors in accelerating progress. InMaharashtra it is clear that social investment in civil societyparticipation (meaning, in this case, community participationrather than NGO participation) has been essential tothe success of the government’s demand-driven strategy forsanitation investment in the state. Among its other developmentalgoals, the Sant Gadge Baba scheme incentivizescollective outcomes (an end to open defecation) rather thanhousehold inputs (toilet construction). It does this not onlythrough financial rewards but through public and peer recognitionof the achievement. The state government prioritizesother development assistance support to villages that attainOpen Defecation Free status, as an additional reward. Thisis a “soft” approach, and benefits are not explicitly withheldfrom those that do not achieve Open Defecation Free status.Significantly, while officers and communities were incentivizedtoward a common goal of ending open defecation, theywere given considerable latitude in how they achieved it.The Brazil case study showed how the unique strength of thepolitical group behind Bahia Azul allowed it to ignore the32Global Practice Team of Sanitation

The Political Economy of SanitationDiagnostic findings from the fieldThe Senegal case study has shown that donor support inproviding evidence is particularly efficient if it is embedneedto engage with municipal governments, civil society,and statutory citizen oversight institutions, and its politicalorientation influenced an approach to working with communitiesthat privileged top-down, short-term mobilizationover sustained participation. While it enabled the program toscale up rapidly, it did not maintain and support the socialcapital created by the program at neighborhood level, whichconsequently may have exacerbated the challenges of systemoperation and maintenance. The process also failed to seizeopportunities to take advantage of community cohesion bylinking these investments with other programs for healthand urban upgrading.In Senegal, the Millennium Water and Sanitation Programme(PEPAM, Programme d’Eau Potable et d’Assainissement duMillénaire)—a framework for unified intervention in thesector that aims to attract investments to reach the MDG—provides the platform for civil society and private sectorparticipation in the sector’s monitoring. PEPAM’s annualreview is usually well attended by government representatives,donors, private sector actors, and civil society andprovides information to all stakeholders on how the waterand sanitation sector develops. It is, however, criticized bysome as having a backward-looking nature that prevents itfrom taking a more active role in shaping the sector’s futuredevelopment.The research confirmed the need for different approachesto social investment between rural and urban communities.The operational approach in Maharashtra, for example, wasvery effective for smaller, cohesive rural communities—thefocus of this research—but has had less impact (so far) inlarger, peri-urban areas.Evidence-based policy making in sanitationThe research also looked at whether governments listen toevidence linking sanitation to development outcomes. Itconfirmed the observation that purely evidence-based policymaking is unrealistic and naive. But it also revealed that whenthe evidence generated assisted policy deliberations in a waythat did not challenge powerful political economic interestsor was built into a well-designed decision-making process, itcould be an effective tool for unblocking or revising policydecisions and budget allocations.In Indonesia, despite the country context that has limitedsanitation investment, decision makers within national governmentwere increasingly using and acting upon evidenceregarding the impacts of low levels of urban sanitationinvestment, and particularly the economic impacts. Whileevidence regarding the links between poor sanitation andpoor health outcomes was not particularly powerful or discussedmuch at the national level, economic evidence hasplayed a greater role. A comparative study on the economicimpacts of sanitation in four Southeast Asian countries wasconsistently mentioned by stakeholders within governmentand among lenders and donors as a key document in galvanizinggovernment interest. This puts a figure on the economiclosses caused to Indonesia due to poor sanitation, and in acountry that is striving to maintain its regional status as aneconomic leader, had a significant impact on governmentinterest in sanitation. 14 In December 2009, the NationalSanitation Conference was opened by the Indonesian vicepresident, who quoted extensively from this study, demonstratingincreased high-level awareness of sanitation issuesand political prioritization of the sector. In 2010 the nationalbudget allocation for sanitation to local governments hasbeen announced as equal to the water allocation. Althoughthe overall water and sanitation budget has been reduced, thesanitation portion has increased to Rs 376 billion (US$40million) representing a fourfold increase over 2009. Suchan increase is unprecedented and confirms the increasedunderstanding among decision makers of the seriousnessof underinvestment in sanitation. However, while these aresignificant improvements in investment levels compared tothe past, this is still just 2 percent of the amount needed tofund the sanitation road map outlined by the government.14 Comparisons with neighbours within the Association of Southeast Asian Nations (ASEAN) in terms of sanitation coverage and the MDGs have also had a significant impact oninterest in increasing sanitation investment. A WSP/USAID conference was organized in the Philippines in 2006–7. Attended by national government stakeholders, there was aperception that if the Philippines could do something, then so could Indonesia, which contributed to the start of the 2007 national summit on sanitation.www.wsp.org33

The Political Economy of SanitationDiagnostic findings from the fieldded in a wider process for the sector’s development. Thewide-ranging institutional reform of the water and sanitationsector in the mid-1990s was facilitated by the WorldBank through a range of carefully prepared and organizedworkshops and informal meetings. Analyses on privatizationmodels and financing issues provided the basis for the designof the contracts and institutional arrangements, such as theseparation of the water and sanitation sectors from eachother. Including the sanitation sector in the responsibilitiesof the private operator was seen as too burdensome, giventhe sector’s poor state (Brocklehurst and Janssens 2004).Similarly, donor-supported analysis informed the design ofthe performance contract between the ONAS and the Governmentof Senegal in 2008 (ONAS/Banque Européenned’Investissement 2008).The national government in India reflected carefully on thefailure of the supply-driven Central Rural Sanitation Programand has devised a program that combines elements ofincentives and rewards to generate demand for sanitationinvestment. This has shifted the levers of power and influencedownward to local government bodies.In Brazil, a well-documented research piece on the healthbenefits of the Bahia Azul investment program (ultimatelymade available in the Lancet, see Barreto et al. 2007) founditself caught between two political administrations. Thetiming of the launch was unfortunate in that the incomingpolitical administration was not keen to give credit to theinvestments of the previous administration.Relationship between accountability and sanitationinvestmentThe relationship between accountability and sanitation investmentwas also explored through the case studies. Good“accountability relations” emerged as vital to securing thedelivery of and accessibility to sanitation investments. Theywere important both as triggers of change and as a means ofmonitoring change. The research revealed a wide range oftypes of accountability relationship. On the whole, donorssupporting sanitation sector investment recognized thecritical role of accountability relations but did not promoteoff-the-shelf, pre-determined approaches to strengtheningaccountability. Instead, they followed a learning-by-doingapproach that was sensitive to different contexts for accountability.Within India, for example, rural sanitation investment ischaracterized by small-scale private household investmentand therefore is outside of the citizen-and-service-providermodel—also known as the “short route of accountability”(World Bank 2004). Hence, in the case of Maharashtra,the government created and strengthened demand outsidethe governance framework of the “rights claimers and dutybearers” model of public service provision. 15 Instead, theemphasis encourages private investment and private behaviorchange. In this way government accountability shifts fromdelivery to outcomes. This has been achieved by havingthe state focus on creating a demand-driven approach tosanitation investment, facilitated by the state using a mix ofconsciousness raising, subsidies, collective financial rewards,“soft” conditionality, and enforcement.In Indonesia—the least promising context for accountabilityrelations in sanitation investment—the political culturehas discouraged demand-driven accountability hat wouldinvolve a stronger voice and greater advocacy from civil society.Some key informants working in the media suggestedthat advocacy is generally difficult and that the governmentgenerally doesn’t want to listen to opinions from the mediaand civil society. So far, in the reformasi era, only the Agencyfor National Development Planning (Bappenas) and theMinistry of Women Empowerment were seen as being opento activists and academics. However, this needs to be put intothe context of extremely low demand (as outlined earlier)and low awareness within civil society and the media itselfof sanitation issues.In Brazil, the emerging regulatory framework for the sectoremphasizes the role of conselhos (oversight committees) orother types of institutionalized participatory mechanismswith consultation/oversight roles and guaranteed service-15 This is the approach that characterizes, for example, the World Bank’s social accountability model of governance.34Global Practice Team of Sanitation

The Political Economy of SanitationDiagnostic findings from the fielduser participation. Despite the considerable potential ofthese structures to enhance accountability, disputes remainover the appropriate balance between this kind of participatoryregulation and the more technical approach favored bythe arms-length regulatory bodies that are being set up byseveral state governments. The issue is further complicatedby the challenge of determining the correct representativesfor participation.While Senegal’s urban water supply sector has been regulatedby innovative contracts since the mid-1990s, the sanitationsector has recently followed this example by entering a performancecontract between the ONAS and the Government.By contractually protecting sector investments in operations,this arrangement strengthens accountability between stateinstitutions and leaves fewer opportunities for adverse politicaleconomy influences.Sector coalitionsFinally, the research confirmed the importance in a wide rangeof contexts of sector coalitions in securing a high priorityfor sanitation investments. Sector coalitions are built withingovernment and between government and nongovernmentalactors. Sensitive lender and donor support can add value tothe coalition-building process. Coalitions anchored all elementsof the sector process discussed above, drawing on theevidence base for pro-poor sanitation investment, encouragingcivil society participation, and developing accountabilityrelationships to ensure investment and delivery.The common characteristics of sector coalitions across thecases studies included a capability to translate a general visioninto concrete steps: “they knew where they wanted to go,” asone key informant in Senegal put it. Sector coalitions wereoften motivated by empathy with citizens or by a concernwith distributive equity. They were able to stand outside thepolitical economy of the sector while understanding andmanage the political economy risks and opportunities. Theyhad credibility and had earned respect from all stakeholdersinvolved in the process.A striking feature of sanitation investment in Maharashtrahas been its success in translating political commitment intobureaucratic action. This translation was achieved largelythrough dynamic and committed political and bureaucraticleaders, many of whom had worked their way up from thegrassroots. Political leaders and departmental officials led theprocess, but they worked effectively with nongovernmentalpartners toward a shared vision. This process was supportedin a low-key but effective way by WSP. In Senegal, sectorcoalitions from the Ministry of Water, Ministry of Finance,the World Bank, and WSP played a crucial role in pushingthrough a successful organization and implementation of theWSS reform process. Well-connected Bank staff membersbased in Senegal were able to identify committed counterpartsand engage with them on a continuous basis (throughformal and informal meetings) to prepare decision makingand government support. In Indonesia, the ISSDP employedsomeone able to facilitate and negotiate who was trustedby different government stakeholders and understood theirrelationships with each other. This helped build and strengthenpartnerships and relationships between key governmentstakeholders in the urban sanitation sector.Evidence from all of the case studies has also shown theimportance of local champions and community leaders.Influential community members—once convinced of thebenefits of better sanitation provision—become credibleadvocates for sanitation services with their neighbors, relatives,and friends. Local or state political leaders at the nexusof constituencies, providers, and policy makers played a keyrole in shaping the debates in Brazil. In Indonesia a few citymayors are increasingly committed to sanitation, increasinglocal sanitation budgets, and contributing to increased pressurebeing brought to bear upon the national government.3.4 Interplay of political and economic factors onsanitation outcomesWith its focus on pro-poor sanitation investment, the researchlooked for evidence of the impact of political economyfactors on distributional outcomes in access to sanitation. Theinterplay of political and economic factors played a majorrole in influencing pro-poor investment. The emergence ofpolitical incentives—in the shape of career advancement orelectoral support—for extending coverage to the poor wereapparent in the cases of Brazil and India.www.wsp.org35

The Political Economy of SanitationDiagnostic findings from the fieldThere was evidence from all the case studies that decentralizedgovernance of sanitation investment can create strongerincentives for, and accountability in, pro-poor investment.Household subsidies, targeted for sanitation investment inbelow-poverty-level households, have been successful inMaharashtra, but crucially only as a minor element of acommunity-based reward approach to incentivizing investment.Similar evidence emerged from Senegal, where thework of CBOs and civil society organizations (CSOs) wasinstrumental in creating demand. The experience with onsitesanitation in Dakar also showed, however, that the pooresthouseholds are unlikely to be able to move up the sanitationladder, despite the subsidies.In contexts of sustained resistance to pro-poor sanitation asa policy priority, an instrumental case for investment can bebuilt, as illustrated by recent developments in policy debatesin Indonesia. Technological and social solutions to the challengeof pro-poor investment are illustrated well in Brazil,where a progressive administration has provided the fundsand support for appropriate technology and social mobilizationto extend sanitation investment into low-income urbancommunities.In the Maharashtra case study, the growing political recognitionand reward for sanitation investment success, discussedabove, is closely linked to the success of the national and statecampaigns to build demand for sanitation investment and soimprove distributional outcomes for the rural poor. This hasshifted political motivation from a point in the mid-2000swhen policy makers in India perceived that a poverty-targetedsanitation program might actually lose them votes, sanitationnot being a priority or a felt need among rural communities.The design of sector investment, with community-level “cleanvillage” awards backed by targeted subsidies for below-povertylinehouseholds, has extended investment to poorer householdswithin villages striving for clean-village status. This was a keyshift in approach away from the failed supply-driven subsidyformat of the Central Rural Sanitation Program. The socialstigma attached to households without pit latrines, illustratedby the increasingly widespread expectation that brides shouldnot go to households without them, illustrates the progressiveimpact of this trend.In recent decades in Brazil, millions of poor householdshave been connected to public sewerage networks throughthe expansion of conventional services and the introductionof innovative alternatives, such as the condominial system.The Bahia Azul program, implemented by the Bahia stateutility EMBASA in the Salvador Metropolitan Region innortheastern Brazil between 1995 and 2007, was quickto adopt the condominial approach to providing sewerageservices to low-income neighborhoods, making significantinvestments in social mobilization work alongside construction.In Bahia Azul as elsewhere, the technological shift tocondominial systems has made the service more affordableand more appropriate to the geography and social organizationof low-income communities.The inclusion of water supply and sanitation as a prioritysector in the Growth Acceleration Program (PAC) in 2007,backed by the allocation of R$40 billion (US$20 billion)from the federal budget (R$8 billion), loans (R$20 billion),and local funding (R$12 billion) over four years, signaled aprogressive shift in investment, although as discussed above,spending has lagged due to low absorptive capacity and theabsence of a clear policy and legal framework. Overall, witha progressive government favoring poorer municipalities, theincrease in federal grant funding through the PAC providesa political payoff as well as being a pragmatic response tolimited local investment capacity.In Indonesia the lack of interest across all sections of society(from metropolitan elites to the urban poor) in the notionof sanitation as a public good has hindered pro-poor orindeed any significant investment. Encouragingly, this isincreasingly being challenged through, among other things,a strong economic case for investment. With increasingevidence of improved economic and health outcomes fromextended sanitation coverage (or equally, the negative economicoutcomes of poor sanitation), the political incentivesfor investment in sanitation are now increasing, includingfor low-income communities.36Global Practice Team of Sanitation

The Political Economy of SanitationDiagnostic findings from the fieldIn Dakar, access to sanitation facilities was traditionally providedfor those living in the areas covered (and connected)to the sewerage network. The PAQPUD for the first timebrings onsite sanitation facilities and to a lesser extent condominialsystems for the poor peri-urban areas of Dakar.The program offers technologically appropriate sanitationsolutions, and households can chose from a range of differentoptions in different price categories—although some ofthese solutions are not categorized as “improved” sanitationunder the MDGs. The subsidies are a one-off investmentsubsidy and are not intended to cover either consumptionor maintenance costs. Moreover, there is awareness withinlocal communities that there is a clear difference betweenthe willingness and the ability to pay for sanitation provision.As one community leader in a semi-urban communityin Dakar summarized: “Some of our neighbors don’t haveenough money for regular meals. How should they affordthe expense of a latrine?” Some communities have respondedto this problem by setting up a fund at community level (forexample, the fund in Diamaguene led by UN HABITAT) tocover the contribution for those who cannot afford to payfor sanitation and encourage support from micro-financeinstitutions (for example, in Ngor).www.wsp.org37

IV.OperationalimplicationsWith these diagnostic research findings in mind we can drawa number of significant operational lessons to help lenderand donor task teams to translate political economy analysis(presented in section 3) into actions supporting pro-poorsanitation investment. Several interlinked elements havecontributed to the success of the sector process in the casestudy countries. We discuss the operational significance ofthese below, drawing on elements of the Action Frameworkintroduced earlier.The case studies confirm and illustrate that effective managementof sanitation investment processes integratesunderstanding and evidence with support for behavioraland institutional change. This means combining a betterunderstanding of the political economy risks and opportunitiesin the sanitation sector with evidence marshaled onthe economic, social, and political impacts of investmentchoices in order to support processes that promote greateraccountability, partnership, and communication.4.1 Timing, tailoring, and location of investment andoperationsPolitical economy analysis can support Task Team Leaders andpractitioners to identify and manage the political economyrisks and opportunities for pro-poor sanitation investment.Task Team Leaders, who lead on investment dialogue, oftenrecognize this and generally have a keen sense of political economythat can support decision making on timing, tailoring,and location. Some Task Team Leaders struggle to deal withpolitical risks, being more comfortable in a bounded technicalrelationship with a familiar ministry, department, or agencywithin government. Box 2.1 provides sample questions for apolitical economy analysis of sanitation investments based onthe study’s Diagnostic Framework and the research strategydeveloped and utilized for this study.Recognizing windows of opportunity for investment requires,at a minimum, long-term engagement and developmentpartner flexibility. This type of flexibility was demonstrated inSenegal, for example, where the World Bank was also able tobring a loan forward in order to avoid losing an opportunity.Beyond this, the case studies have shown that where lendersand donors have understood the political economy and respondedappropriately, they have increased the acceptabilityof funding mechanisms and eased negotiations.Furthermore, careful and strategic sequencing of operationscan encourage reforms that increase the overall impact of investmentsin later phases. In Brazil, the conditions laid downfor access to the relatively modest capital investment componentof the Water Sector Modernization Project (PMSS)provided sufficient incentive for institutional upgrading bythe Bahia state utility (EMBASA), which was then able toleverage much larger volumes of investment resources due toits enhanced credibility and increased absorptive capacity.Tailoring support based on an understanding of politicaleconomy also means being more responsive to local policyand investment processes. The first step is usually to align andsequence operations and support with national planning andpolicy cycles. In Indonesia, for example, a 2009 governmentagreement that the lender-supported City Sanitation Strategyapproach could be replicated and scaled-up fitted with thenext five-year planning cycle. Sequencing different interventionsover different time scales (for example, awarenessraising and improving local planning capacity) has been anecessary first step before making local investments for physicalinfrastructure in order to ensure they are appropriate,effective, and efficient.Tailoring of support can also benefit from a better understandingof the incentives and interests of stakeholders. One38Global Practice Team of Sanitation

The Political Economy of SanitationOperational implicationsconsistent theme in the case studies was the importance ofrecognizing and supporting progressive leaders or championsto succeed and scale up their impact. Stakeholder mapping,of the type illustrated in this research project, can help TaskTeam Leaders identify champions, who may well be individualsor organizations that the World Bank does not normallydo business with—for example, a Ministry of Health officialrather than a Ministry of Water representative. In this way,stakeholder analysis can be a useful tool for seeking outchampions among a wider range of stakeholders.These commitments and the championing of sanitationinvestment can be bolstered by political incentives, as isparticularly evident in the case of Maharashtra. Throughsustained engagement, WSP was able to tailor its support tothis process of political reward for sanitation improvements.Significantly, this form of political “incentivizing” is nowbeing adopted in other states in India.The case studies confirmed the significance of understandingthe location of sanitation investments when designing sanitationinvestments. Technical options and social investment(in incentives, demand generation, strengthened accountability,and social mobilization) varied widely within andacross urban and rural locations in the studies. The successin rural Maharashtra of encouraging collective responsibilityfor low-tech sanitation investment through a careful mixtureof rewards and sanctions was based on strong village identityand mutual accountability. In Brazil, program design inBahia Azul aimed to strengthen local social capital aroundblock-based condominial delivery of appropriate low-techsanitation in densely populated communities. In Senegal,onsite sanitation and condominial systems were extendedto Dakar’s urban poor, who were previously widely excludedfrom existing network-based service provision. Donorsupport for the City Sanitation Strategy in Indonesia hasencouraged city administrations to base sanitation investmentdecisions on their own assessment of their location.4.2 Understanding the sector through rigorousanalysisThe case studies confirmed the utility of rigorous analysis ofpoverty and social impacts of sector policy and investment(World Bank 2003). This analysis provides the evidencenecessary to make a case for pro-poor sanitation investmentand to support policy makers in identifying what types ofinvestment will have the biggest pro-poor impact. Moreover,evidence can be used strategically by donors and internationalorganizations to facilitate the dialogue and process in favorof more pro-poor investments and service delivery.Donors and international institutions in close collaborationwith local entities are well placed to identify appropriateevidence for policy makers and tend to have a comparativeadvantage in providing rigorous analysis to inform reform andsector choices. In Senegal, donors have successfully fundedstudies—for example, the tariff study by ONAS/BanqueEuropéenne d’Investissement (2008)—using national andinternational expertise, to offer policy choices to governmentstakeholders and contribute to the evidence used during workshopsrelating to institutional sector reform. A comparativestudy on the economic impacts of sanitation was undertakenby WSP-EAP in four Southeast Asian countries, includingIndonesia (WSP-EAP 2007, 2008). This was cited by keyinformants (from both within government and internationallenders and donors) as having been a powerful tool in motivatingcentral government stakeholders into action.Furthermore, the research has shown how lender and donorsector support can use analysis of comparative advantagein global practice to support local policy makers and administrationsas they learn lessons from elsewhere and refinetheir operational framework. The kind of support providedby WSP in Maharashtra was geared toward lesson learningthrough exposure to Community-led Total Sanitation(CLTS) and scaling up of good practice. This, rather thancapital investment or strong steering, was exactly what wasrequired from external partners in this context.The timing of information flow is important when one seeksto influence sector dialogue. Even when rigorous analysisis undertaken, dissemination of key findings can get lost,sidetracked, potentially misused, or captured if the timing iswrong. This was the case with the Bahia Azul health impactstudy, which was launched in the transition period betweenone political administration in Bahia and another. It isimpossible to judge whether sanitation investments wouldhave achieved even wider traction had the results of thiswww.wsp.org39

The Political Economy of SanitationOperational implicationsstudy been more widely acknowledged. However, neitherthe World Bank nor the state government as a whole realizedat the outset just how strategic effective communicationcould be. Had they been so cognizant, a different timetable(for example, with release of interim findings based on monitoringdata) could have been agreed to with the researchorganization. This might have helped steer the debate on thevalue of sanitation investments much more clearly towardhealth benefits, which is now where the center of gravity ofthis debate lies in Brazil, as elsewhere.The process of conducting analysis itself can be instrumentalin democratizing the policy process, building and sustainingconsensus over change. This implies that, where possible,appropriate lenders and donors, in close collaboration withlocal entities, should promote analysis that is conducted witha broad group of in-country stakeholders to ensure greaterinclusion. They should link this process to strengthenedpublic debate and communication. This is discussed furtherin section 4.5.4.3 Realigning accountabilityThe research has confirmed that it is vital in managing thepolitical economy of sanitation investment to create the conditionsfor strengthened accountability in the delivery of andaccessibility to sanitation services. This includes horizontalaccountability mechanisms in which different branches ofthe state provide checks and balances. It also includes verticalaccountability relationships in which citizens advocate forchange or provide an oversight function of government orservice providers. Finally, it includes realigning accountabilityby combining horizontal and vertical accountability to allow,for instance, top-down changes to be complemented by amore systematic attempt to engage with grassroots collectiveassociation and mobilization for institutional change.The research has illustrated the value of supporting accountabilitymechanisms as a means of managing the risks frompolitical economy interests and influence. In Indonesia,increasing clarity over institutional roles and responsibilitiescould help increase accountability between citizens and thestate. In Senegal, the carefully designed contracts in thewater and sanitation sector provided the right incentives andstrengthened accountability. A recently signed performancecontract between the government and the National SanitationOffice guarantees state financing if certain performance criteriaare met. Financing for the sector’s operations are thereforeprotected from potential adverse political influence.Moving to a decentralized system of decision making, resourceallocation, service delivery, and regulation requires significantattention. The Brazil case study has demonstrated thathelping to further clarify the roles and responsibilities (or atleast the pros and cons of different roles and responsibilities)at the federal, state, and municipal levels and the capacityrequirements at each level is an important contribution.Vertical accountability focuses on the relationship betweencitizens and policy makers and between citizens and serviceproviders. Vertical accountability mechanisms can bestrengthened by increasing transparency and informationavailability, generating demand for sanitation investment(and therefore for accountability in delivery of sanitation),and strengthening institutional channels for oversight andredress. In Senegal, the World Bank/WSP partnership hassupported information campaigns in order to strengthen accountabilityinitiatives from the private sector and from civilsociety more broadly. The PAQPUD has relied on targetedinformation campaigns to generate demand for sanitationinvestments using local CSOs or the private sector. Despitethese efforts, however, there are still few examples of citizensactively demanding better sanitation provision. If upgradesare made they are mainly driven by waste collection or rainwaterdrainage efforts rather than sanitation in the narrowsense of the definition.In urban Indonesia and in rural India, traditional top-down,supply-driven approaches to sanitation investments haveoften been unsuccessful or unsustainable. Additional socialinvestments in bottom-up processes have helped to increaseaccountability and the sustainability of investments evenwhen there is low initial demand. The City Sanitation Strategyapproach in Indonesia recognizes the difference betweenperceived demands, which often form the basis of top-downapproaches, and actual demands.Perhaps the most significant lesson learned from the researchis the importance of maintaining a flexible approach to40Global Practice Team of Sanitation

The Political Economy of SanitationOperational implicationsstrengthening accountability rather than going for a one-sizefits-allapproach. In the case of Maharashtra, for example, thegovernment has encouraged a different type of relationshipin which the emphasis is on encouraging private investmentand behavior change at household and community level. Inthis way government accountability shifts from delivery tooutcomes. This has been achieved by having the focus oncreating a demand-driven approach to sanitation investment,facilitated by the state using a mix of consciousness-raisingefforts, subsidies, collective financial rewards, “soft” conditionality,and enforcement.New forms of social oversight have been promoted by thecurrent left-wing government in Brazil. The challenge is tofind ways to link the contributions these various stakeholdershave made toward effective regulatory mechanisms. Thegovernment can help to inform and seek support from thepublic about sensitive issues like tariff setting. Social oversightbodies provide a platform for discussions around the costsof providing the service in relation to the price and how thislinks to further investments in upgrading and expanding thesystem. Social oversight bodies, however, are not expected tomake technical decisions about water quality and technicalstandards, which is more clearly under the purview of theregulatory body. Finding ways to ensure clarity around theroles and responsibilities of these two mechanisms will remaincritical in the Brazilian context.4.4 Partnership strategyThe research has confirmed that effective management ofpolitical economy in the sanitation sector requires a partnershipstrategy based on sustained, flexible engagement withstrategic external support. This strategy can also take TaskTeam Leaders and practitioners outside their comfort zoneof engagement with technical ministries to include centralministry partnerships. Ministries of Finance, in particular,are usually far more influential than any sector ministry inshaping public investment. Bank Task Team Leaders usuallyhave good relationships in-country within their respectivesectors, but the overall country dialogue takes place betweenthe Country Management Unit and the Ministry of Finance.For this reason, Country Management Unit support is crucialto any attempt at placing sanitation firmly on a Bank countryprogram, the starting point from which decisions on tasksand budgets all flow.The case studies in this report illustrate well the instrumentalvalue of partnerships for pro-poor sanitation investment. TheMaharashtra sanitation program, for example, is stronglygovernment led. Nevertheless, technical and policy supportfrom WSP has been strategically important. This support hashelped to expose government officials and community leadersto new ideas in order to improve program effectiveness. In Senegal,long-term ongoing engagement has built trust amongkey stakeholders and placed donors in a position where theycan play the role of a facilitator of reform. Well-connectednational donor staff can play a crucial role in understandingthe government’s position and negotiating with the mainstakeholders—both supporters and opponents of reform.Carefully organized and facilitated workshops combined withinformal encounters have provided a vehicle for presentingevidence on policy choices, managing potential resistance toreform, and allowing for continuous engagement.In Brazil, the World Bank is a potential convener or brokerof unlikely marriages of convenience between seeminglydisconnected technical, political, and financial interests.Historically the Bank could have done more to broker theserelationships, and admittedly it is not perceived to be neutral.The perception of being aligned with a political grouping mayhave reduced the Bank’s ability to leverage continuity betweenprograms created by different political administrations.That said, the Bank does bring institutional sector memoryto the table and must remain supportive of the explorationof various options to enhance service delivery. In Indonesia,continued strong long-term support and collaboration withthe government on planning and policy issues, with theBank and government viewed as partners, is beginning toshow results. This approach has strengthened the capacityand willingness of government (central and local) to scale upsanitation planning, while ensuring high levels of nationalownership of the process.4.5 Public debate and communicationBroad participation in sanitation dialogue prevents the debatefrom being captured by powerful interest groups and atthe same time builds and sustains commitment to pro-poorsanitation investment. To encourage this dialogue, developmentpartners are encouraged to support policy makersand bureaucrats in their efforts to secure and sustain publicwww.wsp.org41

The Political Economy of SanitationOperational implicationssupport for institutional change. The state government anddistrict administrations in Maharashtra have sought to ensurethat the sanitation program is well known across the state,and to this end have made extensive use of local mass media,with awards reported widely and given a high profile. Thishas been critical to the program’s success and is reflected inthe program budget allocation for communication.Investment in communication is crucial to generating “effectivedemand” (linked to advocacy) for sanitation within lowincomecommunities. Such engagement can enhance bothprogram quality during implementation and sustainabilityby securing broader buy-in to program aims. In Senegal,using popular topics (water supply, drainage) can provide theplatform for discussions around improving sanitation provisionwith local communities, consumers, and champions ofchange within the communities. (For example, wastewaterand drainage are a problem for many Senegalese communitiesduring the rainy season) In Brazil, the World Bank achieveda strong partnership with the incumbent right-wing politicalgrouping in Bahia. However, the Bank could have made moreeffort to demonstrate to the government’s critics on the leftthat it was using its leverage with this grouping to push ittoward greater openness to public debate and engagementwith civil society. This would in turn have strengthened theBank’s credibility with future administrations from the leftwing.Although the media in Indonesia are generally no more awareof sanitation issues than the general public and coverage islimited, there is potential to develop partnerships that enablesanitation messages to be conveyed effectively. The IndonesianSanitation Sector Development Program (ISSDP) hasrecognized this potential in the design of its second phase,which will have components on advocacy, campaigning,communications, and promotion.42Global Practice Team of Sanitation

V.ConclusionsThis report synthesizes analysis from four country case studies.In each case study the authors retrospectively appliedpolitical economy analysis to a sanitation sector investmentprocess. Overall, the study confirms the importance of assessingstakeholder interests, winners and losers, and incentives.It also confirms the importance of examining the activitiesof formal and informal institutions (including norms andbehavior) while engaging in parallel dialogues and processesto develop technically feasible and politically acceptable sanitationmeasures. When such an analysis and dialogue aredone well, by development practitioners in partner countriesor development organizations, it provides the empirical evidencefor and the rationales behind the following:• why sanitation investments and service provision arenot given adequate priority in lending and nonlendingwork, and• when sanitation investments in such efforts are undertaken,why they are not strategically targeted towardincreasing access to sanitation for the poor.The study found that the interplay of political and economicfactors played a major role in influencing pro-poor investment.The emergence of political incentives—in the shapeof career advancement or electoral support—for extendingcoverage to the poor was apparent in some case studies.There was also evidence that decentralized governance ofsanitation investment can create stronger incentives for, andaccountability in, pro-poor investment.The study also showed that an instrumental case for sanitationinvestment can be built in contexts where pro-poorsanitation faces resistance as a policy priority. With increasingevidence of improved economic and health outcomes ofextended sanitation coverage (or equally, the negative economicoutcomes of poor sanitation), the political incentivesfor investment in sanitation are increasing, including suchinvestment for low-income communities. There was alsoevidence, that technological and social solutions can helpaddress the challenge of pro-poor investment—for instance,through a progressive administration that provides the fundsand support for appropriate technology and social mobilizationto extend sanitation investment into low-income urbancommunities. Investment design that included communitylevel“clean village” awards, backed by targeted subsidies atbelow-poverty-line households, have been successful in somecases. The work of CBOs and CSOs was instrumental increating demand in other cases. Table 5.1 summarizes theadded value of insights from political economy analysis insupport of the Action Framework introduced in this report.Good practice in aligning lender and donor support within-country policy and planning cycles can be enhanced by anin-depth understanding—and effective management—of thepolitical economy dynamics underpinning the policy process.Management in this context does not imply assuming greatercontrol but means strategically supporting progressive processesand actors. This type of engagement can be enhancedthrough the timing and tailoring of sanitation interventions.The introduction of evidence supports the case for pro-poorsanitation investment, with lenders and donors well placedto help coordinate this flow of evidence.Lender and donor attention to the institutional arrangementsfor sanitation investment has been crucial in strengtheningaccountability in the delivery of sanitation services. Politicaleconomy analysis can help lenders and donors supportemerging systems of incentives and sanctions—includingregulatory mechanisms backed by greater civil societyoversight—that fit the sanitation country context. Lendersand donors clearly emphasize partnership in their supportfor sanitation investment: by focusing on processes, politicaleconomy analysis reinforces the importance of sustained andwww.wsp.org43

The Political Economy of SanitationConclusionsflexible partnership arrangements. Political economy analysisfurther highlights the significance of going beyond partnershipto get the broader policy process right. This involvessupporting communication and public policy debate towardsecuring and sustaining investments. This is not just aboutthe principle of democratizing policy discussion but aboutovercoming organizational resistance or capture by seeingcommunication as an opportunity rather than a risk.Political economy analysis is not a separate or competingapproach to economic, social, or financial analysis. It is simplya supporting tool for designing and implementing sanitationinterventions. Political economy analysis cannot instruct TaskTeam Leaders in what to invest, but it can help them, within-country partners, to navigate a process toward pro-poorinvestment and service delivery in sanitation, while definingrealistic limits on what can be done in any given context.Table 5.1 Added value from political economy analysis in support of pro-poor sanitation investmentActionOptimize timing,tailoring, andlocation ofinvestment andoperationsUnderstand thesector throughrigorous analysisRealign accountabilityPartnerstrategicallySupport publicdebate andcommunicationDonor support for pro-poorsanitation investment• Ensure that support tosanitation investment isaligned with existing policyand planning cycles.• Recognize windows ofopportunity for reform.• Use available evidence and/or commission research toinform program design.• Support strengthenedtechnical systems andinformation flows.• Support decentralization andclarification of technical rolesand responsibilities.• Ensure minimum effectiveengagement with key centraland sector ministries.• Support informationcampaigns from one to many(policy makers to public).Added value insights from politicaleconomy analysis• Manage the political economy risks and opportunities to increase impact onpro-poor sanitation investment.• Ensure careful and strategic sequencing of operations to increase the overallimpact of investments in later phases.• Lobby through political economy insights for sanitation investments that areeffective in different locations.• Recognize and support government commitment and local leadership to helppartners succeed and scale up their impact.• Identify opportunities to support investment through political incentivizing.• Lenders/donors are well placed to identify appropriate evidence for differentstakeholders and tend to have a comparative advantage in providing rigorousanalysis to inform reform and sector choices.• The timing of information flow is important. Even when rigorous analysis isundertaken dissemination of key findings can get lost, sidetracked, or potentiallymisused or captured if the timing is wrong (for example, at the start of a newpolitical administration).• Use analysis of comparative advantage in global practice to support local policymakers and administrations to learn lessons from elsewhere and refine theiroperational framework.• Support strengthened accountability through careful design of contracts andspecification of roles and responsibilities.• Support initiatives to build demand and strengthen vertical accountability.• Be flexible: Adapt and support models of vertical accountability and apply tothe country context. The sector process may not be characterized by the kindsof vertical accountability relations central to much lender/donor thinking. Thismeans that support for accountability must be tailored to the country context.• Realign accountability by combining horizontal accountability with verticalaccountability to allow, for instance top-down changes to be complemented bya more systematic attempt to engage with grassroots collective association andmobilization for institutional change.• Ensure that the partnership strategy is based on sustained, flexible engagementwith strategic external support.• Get the process of political economy analysis right: Ensure where appropriatethat analysis is conducted with a broad group of stakeholders to ensuregreater inclusion, and link this process to strengthened public debate andcommunication.• Support wide two-way communication to democratize debate, prevent captureand secure and sustain public support for institutional change.44Global Practice Team of SanitationSource: Authors’ analysis.

The Political Economy of SanitationReferencesReferencesBarreto, M., et al. (2007). Effect of city-wide sanitationprogramme on reduction in rate of childhood diarrhea innortheast Brazil: Assessment by two cohort studies. Lancet370:1622–28.Beddies, S., and J. Holland (2008). Analysing and managingthe political economy of reform. Poverty in Focus:PSIA - Gauging Poverty Impacts: International Poverty CentreJournal. UNDP, New York. www.undp-povertycentre.org/pub/IPCPovertyInFocus14.pdf.Brocklehurst, C., and J. G. Janssens (2004). Innovativecontracts, sound relationships: Urban water sector reform inSenegal. Water Supply and Sanitation Sector Board DiscussionPaper Series, paper no. 1. World Bank: Washington, D.C.Brook, S., R. Rimbatmaja, and P. Widyatmi (2010). GlobalEconomic and Sector Work on the Political Economy of Sanitation:Indonesia Country Case Study. OPM: Oxford.Colin, J., J. Holland, and P. Nair (2009). Global Economicand Sector Work on the Political Economy of Sanitation: IndiaCountry Case Study. OPM: Oxford.Cunha, A., A. Nahoum, C. Mendes, D. Coutinho, F. Ferreiraand F. Turolla (2006) ‘Poder Concedente e Marco Regulatóriono Saneamento Básico’ Cadernos Direito GV 2(2).DFID (2009). Political economy analysis how-to note. DFIDPractice Paper. London.Garbarino, S., and O. Guène (2009). Global Economic andSector Work on the Political Economy of Sanitation: SenegalCountry Case Study. OPM: Oxford.Holland, J. (2007). Tools for Institutional, Political and SocialAnalysis (TIPS) for Poverty and Social Impact Analysis (PSIA).World Bank: Washington, D.C.Kolsky, P., E. Perez, W. Vandersypen, and L. O. Jensen(2005). Sanitation and hygiene at the World Bank: An analysisof current activities. Water Supply and Sanitation WorkingNotes 6. World Bank: Washington, D.C.ONAS/Banque Européenne d’Investissement (2008). Étudetarifaire restreinte dans le cadre de la négociation du contrat deperformance a signer par l’état du Sénégal et l’ONAS: Rapportfinal. Dakar.OPM (2009a). Global Economic and Sector Work on the PoliticalEconomy of Sanitation: Research Strategy. Oxford.OPM (2009b). Global Economic and Sector Work on the PoliticalEconomy of Sanitation: Desk Review. Oxford.Shankland, A., K. Caplan, I. Paiva, K. Neder, H. GómezBruera, and L. Lupo (2010). Global Economic and SectorWork on the Political Economy of Sanitation: Brazil CountryCase Study. OPM: Oxford.Satterthwaite, D., and G. McGranahan (2006). HumanDevelopment Report 2006: Overview of the Global SanitationProblem, Background Report. UNDP: New York.UNDP (2006). Human Development Report 2006. BeyondScarcity: Power, Poverty and the Global Water Crisis. NewYork.World Bank (2003). User’s Guide to Poverty and Social ImpactAnalysis. Washington, D.C.———(2004). World Development Report 2004: MakingServices Work for Poor People. Washington, D.C.———(2006). World Bank’s increased focus on basic sanitationand hygiene. Water Supply and Sanitation Feature Storyno. 3. World Bank: Washington, D.C.www.wsp.org45

The Political Economy of SanitationReferences———(2007). Terms of Reference for Global Economic andSector Work (ESW) on the Political Economy of Sanitation inFour Countries. WSP/SDV/ETW/FEU, Washington, D.C.———(2009). Problem-Driven Governance and Political EconomyAnalysis. Good Practice Framework. Washington, D.C.World Bank/OPM (2008). The Political Economy of PolicyReform: Issues and Implications for Policy Dialogue and DevelopmentOperations. Report no. 44288-GLB. Washington,D.C.WSP-EAP (2007). Evaluation of the Economic Impacts of Sanitationin Indonesia: A Study Conducted under the Economicsof Sanitation Initiative (ESI). Draft, 25 September. WorldBank: Washington, D.C.———(2008). Economic Impacts of Sanitation in SoutheastAsia: A Four-Country Study Conducted in Cambodia, Indonesia,the Philippines and Vietnam under the Economics ofSanitation Initiative (ESI). World Bank: Washington D.C.———(2009). Urban Sanitation in Indonesia: Planning forProgress. Field note, April. Jakarta, Indonesia.46Global Practice Team of Sanitation

The Political Economy of SanitationAnnex A - MethodologyAnnex A - MethodologyA.1 Research hypotheses and questionsThe desk review informed the research strategy in two ways:it confirmed the usefulness of the conceptual framework asguiding the methodology for this research, and it generateda set of issues for individual country case studies that weresubsequently explored further through the fieldwork. 16 TableA.1 provides an overview of these issues following theanalytical distinctions among country context, sector arena,and sector process introduced in section 2.Table A.1 Issues emerging from the desk reviewCountry context Sector arena Sector process• The relationship between publicopinion regarding the importanceof sanitation provision and thedemand for better services• The significance of contextualperceptions regarding whethersanitation is a public or private(household) responsibility• The implications of stigma attachedto sanitation• The contextual importance ofsanitation compared to otherinfrastructure investments, includingwater• The visibility of sanitation in thepolitical discourse• The impact of the historical (includingcolonial) legacy• The impact of urbanization onsanitation sector challenges• The degree to which there is anational vision and strategy forsanitation• The strength of the link betweensanitation visions and pro-poorpolicies• The degree of clarity of stakeholderresponsibilities for sanitationpolicy at the federal level• The significance of decentralizationand the relationship betweeninstitutions at the federal andregional levels• The significance of subsidies toprovide incentives for pro-poorsanitation provision• The nature and impact of publicprivatepartnership institutionalarrangements for sanitation provision• The degree of institutionalizedcivil society involvement in serviceprovision• The role and impact of regulationand quality control• The impact on sanitation sectorinvestment priorities of institutionalcommitments to cost recovery• The ongoing nature and extent ofpublic debate and space for civilsociety participation in sanitationdecision making• The relationship between participatoryplanning/ budgeting andsanitation investment• The sector processes underpinningtechnology choices in sanitationinvestment• The ongoing and changing influenceof international donors andorganizations on sanitation investment• The risks and opportunities associatedwith champions of changeand opponents• The role of key events and turningpoints• The equity implications of ongoingdebates over cost recovery in thesanitation sector16 This annex draws heavily on the research strategy (OPM 2009a) but does not repeat information provided elsewhere in the Synthesis Report.www.wsp.org47

The Political Economy of SanitationAnnex A - MethodologyA set of research questions (presented in table A.2) has beendeveloped to guide the country case study teams in testingand analyzing country-specific hypotheses. These questionsemerged out of the desk study, from the study terms of reference,and from discussions with the World Bank team and(national and international) consultants. This table representsa menu of questions from which individual country teamshave selected a set to develop their country-specific hypotheses.Under each framework area the country teams haveidentified a set of risks and opportunities for effective politicaleconomy management of sanitation sector investmentprocesses. The sets of country case-study-specific hypotheseswere developed before going into the field, through detailedconversations with World Bank/WSP staff in India (thepilot country for this fieldwork), Brazil, Indonesia, andSenegal.Table A.2 Research hypotheses and questionsOverallResearchQuestionsFramework focusHypothesesQuestionsFramework focusHypotheses• Why are sanitation investments and service provision not given adequate priority in lending and nonlending work?• And when such efforts are undertaken, why are they not strategically targeted toward increasing access tosanitation for the poor?Country context• The cultural and historical context is a significant determinant of sanitation investment (country hypotheses need tospecify a key determinant).• Public policy debates on sanitation within and outside government are usually limited in scope and depth, withnegative implications for sanitation investment.• There is a vision for sanitation; the agenda has been driven forward at the national level and is government owned.• Rapid urbanization is an important driver of sanitation investment.• What is the cultural and historical background to sanitation investment? What is considered “adequate”sanitation? What are the sociocultural drivers for or constraints to improved sanitation?• Has there been a high level of activity around sanitation sector investment in recent years?• How visible is sanitation as an issue in policy debate /media coverage?• What (if any) are the electoral returns to sanitation investment? Was improved sanitation discussed during thepast election campaign?• What priorities does the national sanitation strategy signal? Is it linked to the poverty agenda?• Who owns/maintains which assets (land, wastewater treatment plant, network, etc.)? How are networksestablished and expanded, and what are the processes for connecting new households?• How do poor households manage and treat their sewage (pit latrines, septic network, etc.)? Do poor householdshave choices regarding different sanitation options? What incentives exist for households to connect tosanitation networks (if this option exists)? How are these incentives perceived by households, centralgovernment, local government, private sector, civil society, and international donors and organizations? What isthe balance between “hard” and “soft” investment in sanitation?Sector arena: institutions• Sanitation has no institutional “home.” This adds to the complexity of sector planning and resource allocationprocesses and limits institutional accountability for progress.• National policy has only a limited impact on the planning and targeting of new investments, and on servicedelivery; cross-sectoral decision making for sanitation investment is more effective at the subnational level.• Increased sanitation investments are not hindered by fund availability.• Policy makers consider that it is possible to achieve cost recovery in sanitation and this influences the level andpattern of sanitation investment.• Government actively encourages the participation of NGOs and the private sector in infrastructure developmentand service delivery. Both play a significant part but the nature of the relationship (e.g., contract design) has amajor impact on investment.• National/subnational institutional relations militate against increased investment in sanitation.• Investment prioritization is driven by the availability of technology rather than local need.Continued48Global Practice Team of Sanitation

The Political Economy of SanitationAnnex A - MethodologyTable A.2 Research hypotheses and questions continuedQuestionsPublic investment• What are the institutional constraints to (i) increasing allocations to sanitation in the national budget, (ii) planningsanitation infrastructure, or (iii) constructing and maintaining sanitation infrastructure?• Is there an effective institutional home for sanitation investment?• Do allocated budgets normally reach their intended destination? What are the political economy influences (i.e.,decision-making processes by powerful stakeholders) on the flow of budgets in the sanitation sector? Are theycaptured or diverted and by whom?• Are government budget commitments for sanitation fully utilized during the year? If there is an under-spend, isthis a function of political economy (e.g., rents)? Does the government budget have a mechanism for fundingprojects that last for more than one year? Does the government budget include an explicit subsidy for therecurrent and capital costs of sanitation service provision and investments? If so, is this identified at central orlocal level?• Do government agencies responsible for managing the operation and maintenance of public services haveseparate accounts for sanitation services? If yes, do they clearly demonstrate where investments are made andwho benefits from investments? And are these ever referred to in policy debate or discussed in public?• Can municipalities borrow money, float bonds, or raise funds in other ways for sanitation services? Do onsitesanitation services have options for different forms of finance? Are finances pooled with regard to promotion,building, collection, treatment, and disposal (for either sewerage or onsite)? Or do they come from different armsof the federal, state, or municipal government? What kind of funding is available for different types of providers(municipal, state-run company, joint venture public-private, private company)? If most municipalities access loanfunds to build their infrastructure; what are the sources, terms, and conditions?• How is household financing leveraged (via water bills, sanitation tax, etc.)?• Is cost recovery possible but not introduced? Why is this the case?QuestionsPrivate investment• To what extent has the private sector, or communities, been encouraged to participate in sanitation sectorinvestment? What are the political economy constraints or opportunities for private sector participation, includingconcessions, management contracts, or other forms of non-public-sector involvement (e.g., community-runschemes)?• What scale and size of private sector or community participation is involved in sanitation investment? Howsuccessfully does this fit with public sector investment? What are the motivations for and outcomes of privatesector participation? Are the government and private sector or community responsibilities for sanitation stable?Does any uncertainty over this affect financing plans (e.g., unknown future ownership of assets or extent ofcontinuing subsidization)?• How are private sector or community contracts awarded—by direct negotiation or some form of competition?If the latter, what form and what were the criteria: informal/formal? Who was responsible for the award? Havecontracts been renegotiated and why? How do the terms of the contract benefit society or profit the privateprovide/company? What are the difficulties of operation facing the firm on the political/bureaucratic arena and onpractical/in-the-field arena? Is the process considered a fair process?• How are contracts/licenses awarded, monitored, and renegotiated for private providers?Continuedwww.wsp.org49

The Political Economy of SanitationAnnex A - MethodologyTable A.2 Research hypotheses and questions continuedQuestionsFramework focusNational—subnational institutional relationships• In a context of decentralized investment, how do the institutionalized power relationships between national andsubnational governments affect the priority afforded to sanitation at regional and local level? What other servicesare managed in similar ways to sanitation (e.g., water, refuse, housing, power)?• Are intergovernmental transfers (from central to subnational governments) allocated to sanitation, or do thesubnational governments have discretion over how transfers are spent, and thus may not spend funds onsanitation? Can local government raise enough revenues to provide sanitation services?• In contexts of decentralized sanitation delivery: What is the regulatory/ legal framework and how does thisimpact on sanitation investment and outcomes?• Is cross-sectoral decision making more effective at the subnational level? Are subnational governments ableto predict revenue (capital and investment budgets) from national government? If not, how does this affecttheir decision making on sanitation? Are supplementary budgets an important part of public finance? If so, dosanitation projects tend to get a higher share of the supplementary budget than the normal annual budget?• Are subnational governments primarily accountable upward to central government or downward to the peoplethey serve? Is there evidence of social accountability between sanitation service providers (public, private,communities) and citizens?• What characteristics of the political (party) system affect incentives for federal transfers to states/municipalitiesfor sanitation? Is sanitation policy easier to implement when local and national governments are from the sameparty?Sector arena: stakeholdersHypotheses• Within the center of government there is competition over resources, power, and authority associated withsanitation, with negative consequences for investment levels.• Regulation of sanitation investment brings potential benefits in terms of transparency, accountability, learning,and feedback.• Communities and households are less interested in sanitation investment than in other services and are lesswilling to pay for sanitation services.QuestionsSanitation investment• Which stakeholders have power over (i) decision-making authority about access, collection, treatment (includingtype of sanitation service provision: wet, dry), and investment: (i.e., central government, local government, privatesector, civil society, international donors and organizations); (ii) regulation and licensing; (iii) implementation,investment, and maintenance; and (iv) price setting? What are the power and interest characteristics of thesestakeholders in relation to sanitation implementation?• Which stakeholders (public, private, communities, donors, IFIs, etc.) support and which oppose pro-poorsanitation services and investments and why? What are the perceived benefits of providing services andinvestments to non-poor groups? How could this be changed?• Within the centre of government, is there competition over resources, power, and authority associated withsanitation between (i) line ministries and (ii) central and local government levels? What are the recurrent keypoints of contention? Which stakeholders have what kind of stakes in this? Why? How could they be solved?• How dependent is securing a higher priority for sanitation investments and services on the presence ofstakeholders who are sector champions? How can support for sanitation improvements be institutionalized?• What kind of regulation exists? What benefits does it bring? Why and how?Demand for sanitation• What motivates communities, households, or other groupings (e.g., local businesses) to be interested insanitation investments (e.g., tourism, industry, environmentalism, health)?• What evidence is there of willingness/ability to pay for informal sanitation services? What factors affectwillingness to pay?• What are the trade-offs for households (e.g., limited and/or insecure income, difficulties with long-terminvestments of promises, risk of maintenance expenses)?Continued50Global Practice Team of Sanitation

The Political Economy of SanitationAnnex A - MethodologyTable A.2 Research hypotheses and questions continuedFramework focusHypothesesQuestionsSanitation sector process: Building coalitions for change• Civil society participation in national policy frameworks and processes is the most effective way of raising theprofile of sanitation in central government.• Governments listen to evidence linking sanitation to development outcomes.• Governments feel pressure for accountability from civil society/external advocacy on sanitation.• Securing a higher priority for sanitation investments and services depends heavily on the presence of sectorchampions.• Social investment in local processes is critical to sustainability of sanitation investment.• Rural and urban communities differ markedly and this necessitates different approaches to communityengagement when improving infrastructure and services.• Lenders and donors are major drivers of pro-poor sanitation investments.• Do governments feel pressure for accountability from civil society/external advocacy on sanitation? If civil societydoes not push for sanitation, is this due to a lack of consciousness among the public about sanitation as a policyissue? Or does it reflect a common perception that sanitation is a private rather than public responsibility? Is thisdue to a deficit in participatory governance?• Do different central and local government ministries collaborate on sanitation provision (e.g., Ministry of Financetalks to Ministry of Health talks to Ministry of Water)? Which ministries are supporters and which are opponentsof sanitation investments (champions/opponents)? Why do they take this stance? How could noncollaboration beaddressed?• What is the role of lenders and donors? How do they collaborate with central and local government, private sector,or communities on sanitation provision?• In contexts of decentralized sanitation delivery, is local government more externally accountable than nationalgovernment? Does local government provide public reports (including budget allocation to sanitation) on (i) allservices and (ii) sanitation services?• If governments (central, local) do not invest in sanitation, or not in pro-poor sanitation, is this due to low capacity orlow benevolence?• Does the government actively encourage and support the participation of NGOs and the private sector ininfrastructure development and service delivery (e.g., via community-driven development support or community-ledtotal sanitation or sanitation marketing)? (See also questions on private sector participation above)• Do national and subnational governments consult nongovernment stakeholders on sector strategy and theplanning of new investments? What level of participation exists? Does the government simply inform the public,does it consult with civil society groups, or does it on occasion enter into forms of partnership with civil societystakeholders? Does it respond to demonstrations? Is civil society participation limited to “invited” policy spaces, oris it more advocacy-based? Are some stakeholders (officially and/or unofficially) excluded from the debate?• Is civil society participation in national policy frameworks and processes the most effective way of raising the profileof sanitation in central government?• Do governments and lenders/donors invest in local processes? Does this impact the sustainability of sanitationinvestments? Is sanitation investment driven by commitments to technological options that are not always testedfor cost-effectiveness under local processes?• How significant is social investment to the impact and sustainability of sanitation investments? How do poorhouseholds manage and treat their sewage (pit latrines, septic network, etc.)? Do poor households have choicesregarding different sanitation options? What incentives exist for households to connect to sanitation networks (ifthis option exists)? How are these incentives perceived by households, central government, local government,private sector, civil society, and international donors and organizations? What is the balance between “hard” and“soft” investment in sanitation? Do governments and lenders/donors make a connection between investment incollective organization and networks and sanitation sustainability? How do they characterize this relationship?• How do differing rural and urban contexts influence approaches to community engagement when deliveringsanitation investments? Have community-based approaches to sanitation been tried? Is community participationperceived as making a contribution to ownership and sustainability? Are there any concerns about the level of costsinvolved in community participation and the possible implications of this for financial sustainability and replicability?Continuedwww.wsp.org51

The Political Economy of SanitationAnnex A - MethodologyTable A.2 Research hypotheses and questions continuedFramework focusHypothesesQuestionsDistributional impacts• Sanitation policy has a pro-poor dimension but this has limited impact the on the planning and execution of newinvestments.• Subsidies and capital projects earmarked for the poor are not effectively targeted.• Insufficient attention is paid to the design of infrastructure and services suited to the needs low-incomecommunities.• There are secondary impacts of sanitation investment on employment that should be considered (gain/loss).• There is a greater concern with distributional equity at subnational levels of government compared with nationalgovernment.• How is equity addressed in sanitation sector investment? Has the government made a deliberate connectionbetween increased access to sanitation and pro-poor policy?• Which stakeholders support or oppose pro-poor investments? Which stakeholders capture benefits?• Which socioeconomic groups in which geographical locations benefit from sanitation provision?• Do subsidies for the poor exist? If yes, what kind of subsidies exist? How effectively are those subsidies targetedto the poor? Which powerful interests determine targeting and according to which formal and informal rules?• In contexts of decentralized sanitation service provision and investment, is there a greater concern at subnationallevels of government that those services and investments are distributed equitably?• Is the equitable delivery measured and reported effectively? Is the impact of improved sanitation measured?What are the political economy dimensions that affect monitoring and reporting?A.2 Research methods, analytical tools, and process*Two analytical tools—stakeholder analysis and organizationalmapping—were conducted with a subset of keyinformants, generating qualitative data on stakeholders,institutions, and processes and quantitative data on the flowof money and resources. These are introduced in detail inthe following.1. Research methods: Semistructured interviews andfocus group discussionsSemistructured interviewsSemistructured interviews were conducted with key informantsdrawn from stakeholder groups inside and outsideof government in each of the four case studies. Some weredirectly engaged in sanitation sector policy developmentor implementation, some were well-informed observers ofdevelopments in the sector, and others have been involvedin sanitation project design/implementation.Interviewees were identified with the help of World Bank/WSP in advance of the fieldwork, with further identificationthrough a snowballing process in which initial key informantsidentified other interviewees connected to the sector.Key informants with different positions and perspectivesbring their own sets of interpretive biases and analysis of thepolitical economy of sanitation. In this type of qualitativeresearch—where there is no single absolute truth and wheredifference (rather than standardization) is actively sought—trustworthiness in interpretation can nonetheless be strengthenedby cross-checking—or triangulating—the views andanalysis of different key informants and focus groups.• Key informants were selected from the followingcategories of stakeholders:• Government stakeholders/sanitation policy makers:national and subnational governments, Parliament,etc.• Service providers: public and private• Consumers: households and businesses• Civil society organizations (CSOs), including NGOs,consumer associations, research organizations• International donors, organizations, and projectteams52Global Practice Team of Sanitation

The Political Economy of SanitationAnnex A - MethodologyThe interview followed the form of a free-flowing conversationwith structure provided by the set of hypothesesand accompanying research questions. Notwithstanding acommitment to clear and plain language, semistructuredinterviews, as an interactive method, allow for questions tobe clarified with the interviewee during the interview. Interviewerscan encourage the interviewee to seek clarificationso that a shared understanding is developed, increasing thequality and reliability of the answers provided.Focus group discussionsFocus group discussions were conducted with a small numberof interest groups connected to the sanitation sector,with prioritization given to perspectives from residentialcommunity members and civil society organizations (forexample, consumer protection groups and NGOs involvedin awareness raising on the importance of sanitation).Several areas of this research—with associated hypotheses—lent themselves to being explored through focus groupdiscussions. These include questions regarding the natureof demand for sanitation, perceptions of what is considered“adequate sanitation,” more general perceptions of sanitationinvestment processes and outcomes, and the extent and impactof community participation on sanitation investmentdecision making and outcomes.Stakeholder analysis (discussed below) has informed thepurposive sampling of interest groups for focus group discussions.These discussions were organized with specific goals,structures, time frames, and procedures and with a group ofpeople with a common interest: for example, civil societyorganizations that are advocating for pro-poor sanitationinvestment.There are a number of principles that were applied to theselection and facilitation of the focus group discussions.Groups were typically composed of six to twelve participants.With larger groups it becomes difficult to ensurethat all participants can contribute freely and meaningfully.With fewer than six people, on the other hand, one or twoindividuals might tend to dominate. The facilitators ensuredthat, although the groups have a common interest, they donot include participants who are close friends, as this mightreduce independent thinking and expression. As with semistructuredinterviews, triangulating the findings fromone focus group with one or two additional focus groupsheld with different participants from the same interest groupincreases the trustworthiness of those findings.2. Analytical instruments: Stakeholder analysismatrices and organizational mappingQualitative and quantitative narrative analyses were aidedby the use of a set of two standardized analytical tools thatexamine stakeholders, institutions, and processes: stakeholderanalysis matrices and organizational mapping.Stakeholder analysis matricesA “stakeholder” refers to an individual, community, group,or organization with an interest—or stake—in a particularoutcome. The stake is rooted either in the fact that they willbe affected positively or negatively by the outcome or in theirability to influence the prospects for the outcome.Stakeholder analysis is a systematic methodology that usesqualitative data to determine the interests and influence ofdifferent groups in relation to a policy or sector. A stakeholderinterest or power matrix maps two variables that describe astakeholder’s interests and power relationship to a particularpolicy or sector. (See figure A.1 for an illustrative examplefrom one of the case studies.) We have selected to map theinterests and power of different stakeholders in relation tosanitation sector outcomes. The power dimension refers to theextent to which a stakeholder party can affect the outcome(on the vertical y axis), while the interest dimension refers towhether the stakeholder is positively or negatively affectedby the outcome (horizontal x axis).Stakeholder analysis matrices follow a series of steps andcan be conducted with individual key informants or infocus groups. We have worked with a selected subset of keyinformants to populate and explain the matrix. A politicaleconomy narrative that interprets this matrix for the readerwas then developed through the further key informant andfocus group discussions.www.wsp.org53

The Political Economy of SanitationAnnex A - MethodologyHighInfluenceLow121196841331AC1072BDSupport Neutral OppositionNotes: A = High Power and SupportB = High Power and OppositionC = Low Power and SupportD = Low Power and Opposition145InterestOrganizational mappingOrganizational mapping is a qualitative method for mappingand tracing the cause-effect flow of resources anddecision making following policy and investment decisions.It provides an overview of the formal and informal institutionalframework and organizational practices withinwhich sanitation sector behavior and decision making takesplace. Drawing on our understanding of the stakeholdersand institutions involved, their interests, and the existingpower dynamics, this tool traces a sequence of decisions todescribe and explain how institutions and processes operatein each case study country and how these have impactedsanitation investments and outcomes. This analysis hasgenerated findings on how policy stakeholders, includingWorld Bank and WSP in Brazil, India, Indonesia, andSenegal have identified and managedthe political economy risks and opportunitiesthrough their engagementwith the sanitation sector.Organizational mapping aims to makeflows of decision-making processesaround sanitation investment, resources,information, and activities explicit(via flow diagrams) and to identifybottlenecks and constraints, as wellas opportunities for change. Whenused carefully, it can illustrate oftenintricateconnections and sequencesclearly. The tool’s focus on the interveningprocesses between cause andeffect makes it an indispensable toolin political economy analysis.Organizational mapping was in someinstances also applied more specifically,as a modified form of publicexpendituretracking, to describe andexplain quantitatively the flow ofbudget allocations and investments inthe sanitation sector over a given timeperiod. As envisaged, this activity washindered by limits to the amount ofuseful and accessible sanitation data(including time series data) that was available.3. Research processThe research was implemented flexibly in order to respondto contextual variation in each case study country andto the variation in interviewees and focus groups. TableA.3 provided the country teams with an overview of themethods and analytical instruments available to answerthe questions under each element of the framework. Thecolumns to the right also indicate which stakeholders aremost likely to be able to provide relevant insights. At thesame time talking to different stakeholders allowed thecross-checking of information. These insights were additionalto the objective analysis provided by key informantson all areas of the framework.54Global Practice Team of Sanitation

The Political Economy of SanitationAnnex A - MethodologyTable A.3 Overview of methods and stakeholders by framework elementFramework element /questionMethodAnalyticalinstrumentStakeholdersSSI FGD SAM OM Government Service provider Consumers CSOsLenders/DonorsCountry context Sector arena: InstitutionsPublic investment Private investment National/subnationalinstitutional relationships Sector arena: StakeholdersSanitation investment Demand for sanitation Sector process Distributional impacts Notes: SSI=semistructured interview, FGD=focus group discussion, SAM=stakeholder analysis matrices, OM=organizational mapping.A.3 Research sampling and stratificationThe research strategy built on a series of purposive (as opposedto random or probability-based) sampling steps. Giventhe relatively modest resource envelope for this four-countryresearch, the study used a “fit for purpose” sampling methodologythat we believe captured sufficiently the variabilityof stakeholders connected to the sanitation sector in eachcountry and project context.Key informants, stakeholder interviewees, and focus groupswere initially identified through consultations with the nationalteam consultants and secondary clients. Further keyinformants and sanitation sector stakeholders were identifiedthrough a snowballing approach and on the back of thestakeholder analysis. The selected stakeholders representeddifferent “types” of stakeholders (as mapped in the stakeholderanalysis).The country case studies were chosen purposively by theWorld Bank/WSP team. The countries selected represent arange of sanitation contexts and outcomes, identified to generateuseful operational lesson learning through the applicationof political economy analysis. Within the selected countries,there is an element of initial stratification involved in thepurposive sampling methodology. In the case of Brazil, forexample, discussions of project contexts identified a typologyof urban sanitation contexts and then purposively selectedsites based on their learning potential.A.4 Feedback, reporting, and disseminationThe principle of dissemination was an important feature ofthe research methodology, enabling knowledge exchange andreflection among key stakeholders in each case study countryand in Washington, D.C. The study design and terms ofreference did not envisage sophisticated dissemination strategies,however, and the production of the research outputswill need to be part of a broader World Bank disseminationstrategy that will include commitments by the team of consultantsas follows.At the end of the fieldwork period, the team—in eachcountry—offered to facilitate a small debriefing workshop(maximum half a day) providing initial findings, invitingcomments and questions, and providing room for discussionwww.wsp.org55

The Political Economy of SanitationAnnex A - Methodologyon the recommendations. This helped country stakeholdersto internalize the research findings while providing an opportunityfor the research teams to validate the case studyfindings. Debriefings took place in all case study countries atthe end of the mission with the exception of Brazil where—due to country office availability—the debriefing took placeafter the draft report had been submitted.A.5 Methodology modifications basedon the experience of this studyThe fieldwork for this study was staggered, with the Maharashtrafieldwork conducted first in order to allow for methodologicalreflection and modification ahead of fieldworkin the remaining three countries. The field team identifiedthree areas for methodological reflection: the treatment ofresearch hypotheses, site selection, and case study selection.We discuss these below.1. Treatment of research hypothesesThe application of the research hypotheses was originallydesigned with a scoring element to allow interviewees to scoreeach hypotheses on a four-point scale (strongly agree, agree,disagree, strongly disagree) as the basis for cross-countrycomparison. It quickly became apparent that in the contextof research conducted with a wide range of stakeholders indifferent contexts, this scoring would be of limited comparativevalue.This realization prompted a broader reflection on the use ofhypotheses as the basis for the research process. The field teamfound that the detailed thinking and discussion that generatedthe set of hypotheses and attendant research questions wasinvaluable for framing and focusing the research. The teamalso found, however, that the process of testing the hypotheseswas more inductive than deductive. In other words,rather than focusing on proving or refuting the hypothesesand providing empirical evidence (as in deductive research),the research process was more fluid; the research team founditself generating working hypotheses, which were tested andrefined on a more incremental than envisaged in the researchstrategy document.The team therefore adjusted the methodology, recommendingthat the fieldwork• should not be concerned with eliciting scores for hypotheses,unless the scoring process was seen as usefuland appropriate for prompting diagnostic discussion,and• should not get stuck into a “one shot” deductive approachto testing and confirming/refuting the researchhypotheses, but should instead embrace a more fluid,iterative, and inductive approach to developing andrevising/refining/rejecting working hypotheses.2. Site selectionA further methodological reflection concerned the challengesof identifying and visiting “average” communities once thesamples had been stratified. The fieldwork team members inMaharashtra found that their visits were given a high profileby district authorities keen to demonstrate the success of theirsanitation investment strategies by directing our field visitstoward high-performing/celebrated villages. This was partlya function of a research process that was rapid rather thaninvolving a longer period of exposure to a range of villages. Itwas difficult when being hosted by district officers to insist onbeing exposed to average villages in each stratified group.The implication for the next round of fieldwork was thatresearch teams should do more groundwork ahead of timeto identify and select sites for field visits in order to avoid lastminute “engineering” of field visits by host authorities.3. Case study selectionA final methodological reflection concerned the importanceof having detailed discussions with the WSP (or World Bank)country team pre-departure, to ensure local ownership of thework and check that the case study selection was appropriateand would maximize opportunities for learning.In the case of Maharashtra, the working title of the cases study—“Community-LedTotal Sanitation in Maharashtra”—caused some initial confusion as CLTS was not a term usedin that state and the operational approach was quite differentto CLTS as it is commonly understood.WSP in India also expressed some concern that the casestudy should have been concerned with the Total SanitationCampaign nationally, not on a single operational approach.The Indian country context is one in which lender/donorfundedprojects are less significant in advancing progress thanthe governments’ own national program. WSP colleagues feltthat the latter should have been the focus of the study.56Global Practice Team of Sanitation

The Political Economy of SanitationAnnex B - Case study summariesAnnex B - Case study summariesB.1 BrazilOverviewThis study examines the political economy of investmentin sanitation (with a particular focus on sewerage) in Brazilover a period of roughly one-and-a-half decades, since thelaunch of the Water Sector Modernization Project (knownin Brazil as Programa de Modernização do Setor Saneamento,PMSS) in 1993. During this period, Brazil transformedthe institutional landscape of its sanitation sector, gained areputation for innovation in pro-poor sewerage programs,and began to make up some of the huge deficit in sanitationinvestment that it had accumulated by the end of the “lostdecade” of the 1980s.In addition to this national (policy) component, the casestudy includes a regional (program) component that focusedon the Bahia Azul program, implemented by the Bahiastate utility EMBASA in the Salvador Metropolitan Regionin northeastern Brazil over approximately the same period(1995–2007).Brazil has been a major recipient of World Bank lending forWSS investment, both at national and subnational levels,with the Bank supporting key federal government programs(including the PMSS and PROSANEAR) and significantinvestments by state governments and utilities, principallyin urban sanitation in major cities and metropolitan regions(including Salvador, the focus of the Bahia Azul program).Although, given Brazil’s size, the overall proportion of totalsector investment in the country that has derived from WorldBank lending is modest (and indeed the Bank provided onlyaround 12 percent of the total resources invested in the BahiaAzul program), the Bank was perceived as an importantactor at certain times and in certain places within the broadsector processes.In recent decades millions of poor Brazilian householdshave been connected to public sewerage networks throughthe expansion of conventional services and the introductionof innovative alternatives such as the condominial system.While Brazil is currently on track to reach the sanitationMDG in 2015, a significant investment will be required toachieve universal access to sanitation services, particularlyin rural areas. The inclusion of sanitation as a priority sectorin the current government’s flagship Growth AccelerationProgram (PAC) in 2007, backed by the allocation of R$40billion (US$20 billion) of resources over four years for basicsanitation and water, appeared to signal that the challenge wasat last being taken seriously. However, spending has laggedbehind the increase in budget allocations, as it has provedhard to achieve rapid increases in the absorptive capacity ofa sector that has long had unstable and unpredictable levelsof investment.Diagnostic findingsThe study’s analysis of the country context shows that onthe demand side there is an association between sanitation(particularly sewerage) and modernity, and while coveragefor urban water supply is almost universal, Brazil’s deliveryof sanitation has lagged far behind. Achieving universalcoverage in Brazil is, however, complicated by a number oftechnological, social, and economic factors. Social capital andsocial cohesion are important in mobilizing communitiesto invest in sanitation and critical to their ability to lobbyand exert pressure on local leaders. From a political pointof view, since President Lula’s election a more rights-basedrhetoric, which depicts access to improved sanitation as anissue of human dignity and a citizen right, has become moreprominent. Moreover, poor municipalities generally have thehighest level of support for the Lula government; the increasein federal grant funding through the PAC can therefore providea political payoff as well as being a pragmatic responseto limited local investment capacity.On the supply side, while there is a clear technologicalpreference for sewerage, the modified application throughcondominial sewerage (in which groups of householdersassume responsibility for the final links in the system)can change the nature of how services are provided, withwww.wsp.org57

The Political Economy of SanitationAnnex B - Case study summariesgreater expectations placed on the role of householders.Condominial systems also make the service more affordablegenerally and maintain the appeal for different stakeholders:for politicians, for example, it creates relatively big, visiblepublic works programs for investment. Public and privateoperators, construction firms, and other private contractorsbenefit from these capital works programs.Looking at the sector arena, the study found that politicaleconomy factors at the national level have not resulted inopposition to increased sanitation investments per se. Indeed,they now appear to be converging around a broad-basedcommitment to such investments that includes support atthe highest levels of government. However, the study did finda significant influence of political economy factors (linkedboth to stakeholder interests and broader ideologies) in thedisputes among advocates of municipal, state, and privatesectoroperations that left the country without a clear policyand legal framework for the sector during most of the periodof one-and-a-half decades covered by the study. The combinationof the 2007 (Water and) Environmental SanitationLaw with other legislation on concessions, tendering, publicconsortia, and private-public partnerships seems in the viewof most interviewees to have finally established the legal andpolicy clarity needed to underpin increased investment,though some areas of dispute remain.At regional level, the analysis of the Bahia Azul programshowed that it was a broadly successful example of politicaleconomy management, which included technically competentand politically astute handling of relations with the numerousdifferent sources of national and international fundingfor a large and complex program. However, the uniquestrength of the political group behind Bahia Azul allowed itto ignore the need to engage with municipal governments,civil society, and statutory citizen oversight institutions, andits political orientation influenced an approach to workingwith communities that privileged top-down and short-termmobilization over sustained participation. Had the emphasison social capital been more long term, community engagementwith system operation and maintenance might havebeen more effective, and links might have been made toother health and urban upgrading programs. In many areas,however, both customer and service provider are now moresatisfied with an arrangement whereby the utility maintainsthe system for a higher service fee.The sector process analysis begins at the macro level with anoutline of budget decision processes and resource flows forgrants and loans from federal government and IFI programs,which account for the largest share of investment in the sector.While the sector suffers capacity issues around limited viableprojects, the report also argues that political pressures comeinto play at various points along the pathways to approvalof projects and disbursement of funds. These may reflectpublicly announced policy criteria such as PAC allocationsby region, which have led to an increase of resources allocatedto the northeast that, while justifiable on equity and povertyreduction grounds, has according to some interviewees ledto the supply of funding outstripping the absorptive capacityof state and municipal utilities in the region, with negativeconsequences for quality and efficiency. The study goes on toexamine the meso level of political economy factors shapingprogram implementation, taking Bahia Azul as an example.It concludes by examining the micro level of the delivery ofsewerage services in low-income communities, focusing onthe condominial sanitation component of Bahia Azul andcomparing it with the Environmental Sanitation Companyof the Federal District’s (CAESB) condominial sanitationstrategy in Brasília.Operational implicationsBased on the diagnostic discussion, a number of significantoperational lessons can be drawn from the Brazil case studyin order to help to inform future World Bank/WSP interventions.Timing, tailoring, and location of investment and operationsCareful and strategic sequencing of operations can encouragereforms that increase the overall impact of investments in laterphases. In Brazil, the conditions laid down for access to therelatively modest capital investment component of the PMSSprovided sufficient incentives for institutional upgrading byEMBASA, which was then able to leverage much larger volumesof investment resources due to its enhanced credibilityand increased absorptive capacity.Understanding the sector through rigorous analysisThe timing of information flow is important. Even whenrigorous analysis is undertaken (as was the case with the BahiaAzul health impact study), dissemination of key findings canget lost, sidetracked, or potentially misused or captured if thetiming is wrong (for example, at the start of a new political58Global Practice Team of Sanitation

The Political Economy of SanitationAnnex B - Case study summariesadministration). Strategically important studies can benefitfrom a flexible timetable. Interim findings based on monitoringdata of the health impact study could have been used tosteer the debate more actively.Realigning accountabilityIt is not easy to decentralize decision making, resource allocation,service delivery, and regulation. Helping to clarifythe roles and responsibilities (or at least the pros and cons ofdifferent roles and responsibilities) at the federal, state, andmunicipal levels and the capacity requirements at each levelis an important contribution.In Brazil, the political left strongly backs and the currentgovernment favors new forms of social oversight. Linkingthem to regulatory agencies (promoted by the center-rightgroups that dominated the previous government) can increasethe legitimacy of different service delivery options (technologies,for example) and solutions around sensitive issues liketariff-setting. It may also help to overcome perceptions ofWorld Bank biases toward particular approaches, such asits perceived bias in Brazil toward enhancing the role of theprivate sector.Partnership strategyThe World Bank is clearly a potential convener or brokerof unlikely marriages of convenience between seeminglydisconnected technical, political, and financial interests.The Bank is not perceived to be neutral but must remainsupportive of the exploration of various options to enhanceservice delivery.The perception of being aligned with one political groupingmay reduce the World Bank’s ability to leverage continuitybetween programs created by different political administrations.On the other hand, in Brazil like in other countries,the World Bank brings to the table clear institutional memoryin the sector.Public debate and communicationWhen it has achieved a strong partnership with a particularpolitical grouping (as was the case in Bahia), the World Bankshould make full use of its leverage with this grouping to pushit toward greater openness to public debate and engagementwith civil society. Such engagement can both enhance programquality during implementation and enhance sustainabilityby securing broader buy in to program aims.ConclusionsIn Brazil, although the World Bank has accounted for a relativelymodest share of total sector investment, it has helpedto drive innovation and improved performance by encouraginginstitutional upgrading in once-fragile state utilities andby supporting the spread of Brazilian innovations such asthe condominial approach. The analysis of the Bahia Azulprogram showed that it was a broadly successful example ofpolitical economy management, which included technicallycompetent and politically astute handling of relations withthe numerous different sources of national and internationalfunding for a large and complex program. The programwas quick to adopt the innovative condominial approachto provide sewerage services to low-income neighborhoods,making significant investments in social mobilization workalongside construction. However, the unique strength of thepolitical group behind Bahia Azul allowed it to ignore theneed to engage with municipal governments, civil society,and statutory citizen oversight institutions, and its politicalorientation influenced an approach to working with communitiesthat privileged top-down and short-term mobilizationover sustained participation.B.2 IndiaOverviewThe Total Sanitation Campaign (TSC) was launched acrossthe rural areas of India in 1999 and presented an importantshift away from earlier supply-driven sanitation programs.TSC has a set of defined components, which includes information,education, and communication; communitymobilization activities; construction of household toiletsand community complexes; and provision of toilets in governmentschools and anganwadis (child-care and mothercarecenters). Most importantly, TSC differs from previouscampaigns in that, for most participants, there is no governmentcontribution to the capital cost of sanitation facilities.Designed as a demand-driven project, the TSC emphasizesawareness creation for a cleaner environment and hygienichabits at the household and community levels.The TSC program failed to take off in most of the states until2004–5. The political economy of the program provides anumber of significant reasons for this failure. Most of thestates were reluctant to implement a low-subsidy program,in particular a subsidy that was not extended to householdswww.wsp.org59

The Political Economy of SanitationAnnex B - Case study summariesabove the poverty line. On the demand side there was a lack ofa felt need among communities for several reasons, includingpoverty, the ready availability of open space in rural areas,lack of information and knowledge, and above all, long yearsof habitually defecating in the open.The government of India’s MDG commitments have motivatedit to devise innovative ways to strengthen the TSC,including notably an incentive/award scheme designed tospeed up coverage. This scheme, the Nirmal Gram Puraskar(NGP, Clean Village Award), has become one of the keydrivers of the TSC program. NGP was introduced in 2003by the government of India as a postproject reward to village,block and district panchayats (councils) that achieved thestatus of Open Defecation Free and fully sanitized unit. TheNGP was inspired to a large extent by the Sant Gadge Babascheme adopted by the government of Maharashtra. 17The progress of the TSC program as a whole has acceleratedsince 2005, and national coverage was reported to be around57 percent by 2008, compared to just 21 percent in 2001 and31 percent in 2005. 18 A major contributor to this improvementin fortunes is the role that Maharashtra has played asa laboratory of good policy and practice.Diagnostic findingsThe study’s analysis of the country context has confirmedthat decentralization is firmly established in Maharashtra,and that some senior political leaders and officers have workedtheir way up though the hierarchy, bringing with theman understanding of and commitment to grassroots action.There is also a long history of social movements led by localchampions in Maharashtra, including B. R. Ambedkar, whospearheaded the liberation of oppressed castes. Sant GadgeBaba was a revered pioneer of sanitation and hygiene in thestate in the nineteenth century and an ideal figurehead for astate campaign that incorporated sanitation investment.The sector arena discussion suggests that in rural sanitation,with its relative lack of capital intensive hardware and greaterfocus on process, the stakeholder interests and institutionalarrangements from the federal down to the local level arerelatively uncontested and open to influence for progressivesanitation investment. Respected leadership, a lack of partisanassociations, and public recognition for local efforts all helpedto advance the program. Effective use of limited governmentfunds was also integral to its success: since the bulk of stategovernment funds were used for promotion and prizes awardedon the basis of transparent criteria, opportunities for thediversion of funds were quite limited. Moreover, the use ofrewards and recognition leveraged considerable communityinvestment on top of the funds available from the TSC. Whilethe private sector—rural marts and local masons—supportedlatrine construction, private sector participation and associatedregulation were not part of the political economy storyemerging from Maharashtra. In contrast to urban sanitationcontexts, there are no big contracts—households appointtheir own masons—so competition with public servicesdoes not arise.The sector process analysis confirms that civil society participation(meaning community participation rather thanNGO participation) has been crucial to the success of thegovernment’s demand-driven strategy for sanitation investmentin Maharashtra. Due to a sustained, government-ledcampaign, a gradual shift is evident whereby toilet use isbecoming institutionalized as the social norm in at least someparts of the state—people accept that the time has come tomake a change. Moreover, a very significant driving forcebehind this demand generation has been the role of sectorchampions. These included a minister and two officers whohelped to ensure bureaucratic support for the program. Theybelieved in rural development and shared a passion for improvingsanitary conditions. External development agencieshad a subtle but significant role at different institutionallevels. WSP helped by exposing state government and GramPanchayat representatives to promotional approaches andlow-cost sanitation technologies from other places. Theseinspired and informed the design of a program customizedto the Maharashtra context. WSP and UNICEF both wereable to provide flexible resources in a rapid, responsive wayto fill gaps in government funding and procedures, especiallyin the areas of learning and communications.17 While the NGP award is given by the central government, the Sant Gadge Baba are disbursed by the government of Maharashtra and can be spent at the discretion of the respectivepanchayats.18 See Government of India, Department of Drinking Water Supply, http://ddws.nic.in.60Global Practice Team of Sanitation

The Political Economy of SanitationAnnex B - Case study summariesOperational implicationsBased on the diagnostic discussion a number of significant operationallessons can be drawn from the India case study in orderto help to inform future World Bank/WSP interventions.Timing, tailoring, and location of investment and operationsEffective support can be built by recognizing and supportinggovernment commitment and local leadership. Thisinvolves understanding the importance of sector championsand tailoring support to help them succeed and scale uptheir impact. A striking feature of sanitation investmentin Maharashtra has been its success in translating politicalcommitment into bureaucratic action. This translation wasachieved largely through dynamic and committed politicaland bureaucratic leaders, many of whom worked their wayup from the grassroots. This bureaucratic commitment hasbeen bolstered by political incentivizing. Senior officialscommitted to sanitation in the early years in Maharashtrahave been promoted, albeit sometimes to unrelated sectors,and the government recognizes and rewards officers whoperform well in the sanitation program. This form of politicalincentivizing has now started to be adopted in other states.Through sensitive and sustained engagement the WSP wasable to tailor its support to this locally owned process.Understanding the sector through rigorous analysisLenders and donors can use analysis of comparative advantagein global practice to support local policy makers and administrationsto learn lessons from elsewhere and refine theiroperational framework. This involves identifying how andwhen they can add value to an ongoing process of change ininvestment strategies. The kind of support provided by WSPin Maharashtra was geared toward lesson learning throughexposure to CLTS and scaling up of good practice. This,rather than capital investment or strong steering, was exactlywhat was required from external partners in this context.This type of support can be tied to the promotion of moreinclusive policy debates. Lenders and donors can look toencourage, where appropriate, analysis conducted with abroad group of stakeholders to ensure greater inclusion,and can link this process to strengthened public debate andcommunication.Realigning accountabilityThere is scope for lenders and donors to adapt and supportmodels of accountability in the sanitation sector based oncontext. The sector process may not be characterized by thekinds of vertical accountability relations central to muchlender/donor thinking. In the case of Maharashtra, the governmenthas encouraged a different type of relationship, inwhich the emphasis is on encouraging private investment andprivate behavior change. In this way government accountabilityshifts from delivery to outcomes. This has been achievedby the state focusing on creating a demand-driven approachto sanitation investment, facilitated by the state using a mix ofconsciousness raising, subsidies, collective financial rewards,“soft” conditionality, and enforcement.Partnership strategyThe study highlights the utility of ensuring that partnershipstrategies are based on sustained, flexible engagement withgovernment partners. The Maharashtra sanitation programis strongly government led. Nevertheless, technical andpolicy support from WSP has been strategically important,especially in exposing government officials and communityleaders to new ideas and in helping to strengthen programeffectiveness.Public debate and communicationFinally, lenders and donors can support policy makers and bureaucratsto secure and sustain public support for institutionalchange. The state government and district administrationsin Maharashtra have sought to ensure that the sanitationprogram is well known across the state, and to this end havemade extensive use of local mass media, with awards reportedwidely and given a high profile. This has been critical tothe program’s success and is reflected in the program budgetallocation for communication.ConclusionsIn Maharashtra, external development agencies had a subtlebut significant role at different institutional levels. WSP helpedby exposing state- and village-level government representativesto promotional approaches and low-cost sanitation technologiesfrom other places within and outside India. Theseinspired and informed the design of a program customized tothe Maharashtra context. WSP and UNICEF both were ableto provide flexible resources in a rapid, responsive way to fillgaps in government funding and procedures, especially in theareas of learning and communications. WSP used the evidentsuccess of the Maharashtra program in advocacy at nationallevel for a shift in emphasis in the Total Sanitation Campaignfrom household inputs (toilet construction) to collectivewww.wsp.org61

The Political Economy of SanitationAnnex B - Case study summariesoutcomes (an end to open defecation). This national level advocacyhelped to influence changes in the TSC guidelines anda strengthened government approach to rewarding outcomeswith the introduction of the Nirmal Gram Puruskar scheme,which provides financial rewards for Gram Panchayats andlarger units of local government that achieve Open DefecationFree status. The World Bank–funded Jalswaraj projecthas actively supported the sanitation program, in particularby strengthening village water and sanitation committees. 19The project built institutional within communities, but wasless successful at integrating with district administrationsanitation institutions and investments.B.3 IndonesiaOverviewIndonesia was initially selected as a case study so that synthesizedlessons from other case studies—namely, India (rural),Brazil (urban), and Senegal (urban)—could potentiallycontribute to addressing political economy challenges ininfluencing sanitation sector reform and decision making.However, given recent positive developments in the sector(where national commitment to sanitation investment hasincreased significantly), the focus was revised to explore howand why government commitment to sanitation has increasedrecently compared to just a few years ago. While the levelof investments actually needed to address the significantsanitation problems in Indonesia is still not sufficient, theincreasing government interest in investment is a major shiftfrom viewing sanitation as a private matter for households.Interest continues to increase at a rate unexpected by some(particularly external) stakeholders.Diagnostic findingsCountry contextHistorically, interest in sanitation has been extremely low inIndonesia. Awareness among all socioeconomic groups andeven among the media is limited, and the disposal of fecesis not discussed in households or communities. The formallanguage lacks a word for defecation, and it is culturally notaccepted to discuss sanitasi in public. Moreover, many partsof Indonesia are geographically well endowed with rivers andnatural drainage channels, and this has meant that householdwaste of all types has been easily disposed of, literally washedaway in rivers and water courses, taking the problem of dealingwith waste both out of view and out of mind. However,open defecation is seen as uncivilized behavior, and latrinesand bathrooms within homes can also be valued as statussymbols or physical demonstrations of wealth in some cases,even though they might not lead to improved disposal ortreatment of wastewater (for example, they are not connectedto a proper and safe facility).At the macro level, a long history of authoritarian rulemakes advocacy (for sanitation and other topics) difficult,and there is the perception that government is not interestedin opinions voiced by the media or civil society. Also,the public expects little from government, and this coupledwith a blurred boundary between public and private serviceprovision means sanitation is mainly perceived as a privateresponsibility. This has been reinforced by a lack of interestfrom the more politically powerful middle classes, who areusually able to provide privately for their general infrastructureneeds.The institutional landscape has undergone significant changethrough the initiation of the decentralization process. Decentralizationwas rapid, if not instant, and not only gavegreater administrative independence to local governmentsbut also moved financial resources and responsibility for theprovision of many public services directly to district level.The sanitation sector has in consequence seen multiple actors,with sometimes confusing and overlapping mandates.The challenge of aligning, coordinating, and simplifying theinstitutional set up is particularly important as ambiguity inmandates means reduced scope for accountability. A furtherkey issue faced due to decentralization is redistricting, wherelocal politicians can petition for districts to be split intosmaller administrative units through a mechanism calledpemekaran. With more money being raised locally throughtaxation, a key motivation for splitting districts has oftenbeen control over resources and rent-seeking opportunitiesfor local elites. While revenues have increased, local budgetpriorities are generally go toward free education, (curative)19 The World Bank-funded Jalswaraj project in Maharashtra supports community-led water supply improvements through a grant-making subproject mechanism in some 3,000villages (out of some 26,000 in the state as a whole). A recent intermediate impact evaluation of the Jalswaraj project concluded that the institutional strengthening of village waterand sanitation committees is the most significant contribution of the project to sanitation investment and sustainability.62Global Practice Team of Sanitation

The Political Economy of SanitationAnnex B - Case study summarieshealth services, and the construction of new governmentoffices to house newly formed local administrations, whicheasily crowd out sanitation and other public health promotionissues.Sector arenaA detailed stakeholder mapping exercise showed that thesanitation sector is characterized by an array of stakeholders—withno single national level ministry responsible forsanitation policy, and responsibilities shared among at leastfive ministries. This institutional complexity and confusionhas not only resulted in a reduction of accountability to thepublic for sanitation service delivery but had also a negativeimpact on international lenders’ and donors’ willingness torisk funding sanitation investments.Given the decentralized nature of service provision, it is notsurprising that local-level government stakeholders and actorshave clear influence over budget allocations. This does notwork to the advantage of sanitation, as local governmentsin most cases prefer to allocate resources to high-visibilityinvestments (for example, roads, irrigation, and buildings).Moreover, despite certain formal processes being in place,informal patron-client relationships play a key role in determininginvestment priorities and funding from centralto local governments. Without having any clear guidance,criteria, or mechanisms for deciding on funding allocations,there is space for political considerations or rent-seekingopportunities to influence investments at local level.This study is concerned with “pro-poor” investments, butthat term is not used often in Indonesia’s sector arena discussions.There has been an almost complete lack of investmentand infrastructure for either rich or poor, who often live atvery close proximity in mixed neighborhoods (in contrast tothe more segregated nature of urban centers in Latin Americaor Africa). The problem is therefore not one of investmentsbeing focused on well-off areas or elites at the expense of thepoor. The focus needs to be on ensuring an adequate sanitationminimum service package for all households. The term“poor-inclusive” is therefore seen as more appropriate forIndonesia and more easily accepted among policy makers.Sector processThis increased interest in and commitment to sanitationhas developed over the last two to three years, but since thestart of 2009 it has become increasingly owned and drivenby national government stakeholders. There is increasinghigh-level ownership within government (in contrast to somepast donor/lender-funded projects, which had tended to besupply driven), and very recent developments suggest thatthe national budget for sanitation infrastructure is likely tobe quadrupled in 2010 and will have a separate budget linefrom water.The Strategi Sanitasi Kota (City Sanitation Strategy, orSSK) approach, which was first tested in the Indonesia SanitationSector Development Project (ISSDP) in 2006, isan evidence-based, strategic development approach led bycity governments. Based on expressed local demand, withexternal consultants acting as facilitators, the SSK approachis a bottom-up process, with participatory room for localgovernment. While this approach was rejected by mostministry stakeholders initially, several factors contributedto its increased acceptance. First, a newly appointed ISSDPstaff member, who had good personal ties and the effectiverelationships, successfully became a facilitator in buildingrelationships within government and increasing interest.A change of the director general within Cipta Karya (theDirectorate General of Housing, Building, Planning &Urban Development, Ministry of Public Works) increasedinstitutional buy-in. Finally, decentralization increasinglychallenged the traditional centralized approach.Another interesting insight from the Indonesian sanitationprocessdiscussion is defining “sanitation” as solid wastemanagement, urban drainage, and sewerage. Linking thesethree elements has created important momentum, increasingpolitical commitments to sanitation. Urban flooding has becomean increasing problem in many cities, with high levelsof public concern and complaints when it occurs. Sewerageand wastewater would not become topics for discussion atthe local government on their own, by including them undera wider definition of sanitation, backed-up with informationon the negative effects of poor sewerage, local governmentshad to start thinking about the issue, and some of the mayors,supported by ISSDP, have promoted the benefits ofsanitation investment.Operational implicationsBased on the diagnostic discussion, a number of significantoperational lessons can be drawn from the Indonesia casewww.wsp.org63

The Political Economy of SanitationAnnex B - Case study summariesstudy in order to help to inform future World Bank/WSPinterventions.Timing, tailoring, and location of investment and operationsAligning and sequencing operations and support with nationalplanning and policy cycles can increase their influenceon policy and planning. In early 2009 there was governmentagreement that the City Sanitation Strategy approach couldbe replicated and scaled up, and the timing of this agreementfits in with the next five-year planning cycle. Sequencingdifferent interventions over different timescales (for example,awareness raising and improving local planning capacity) hasbeen a necessary first step before making local investmentsfor physical infrastructure. This helps to ensure that they areappropriate, effective, and efficient.Understanding the political economy of lending—andresponding appropriately—can increase the acceptability offunding mechanisms and ease negotiations. For example,the association of previous loans with corruption and debtincreased subsequent public and government wariness ofloans from international lenders. Also, past loan negotiationshave been delayed partly as a result of requests by lenders (forexample, for information on internal arrangements betweenlocal and national government) that were perceived to beunacceptable by the government.Understanding the sector through rigorous analysisUsing the resources and comparative advantage of an internationalinstitution can result in research and analysis thatis tailored for specific audiences and can inform sanitationpolicy and investment decisions. A comparative study on theeconomic impacts of sanitation was undertaken by WSP-EAPin four Southeast Asian countries, including Indonesia. Thisstudy was cited by key informants (government, internationallenders, and donors) as having been a powerful tool inmotivating central government stakeholders into action. Tworelated factors can explain this. As a middle-income countrymaintaining high levels of economic growth, Indonesia seesitself as a leader within the ASEAN region; when attainmentlevels for some MDG targets have been worse than in other,much poorer Southeast Asian countries, it has caused somegovernment stakeholders to feel they can, and should, beperforming better. Second, the government is becomingincreasingly interested in economic evidence for its policydecisions, for example, the cost of health care in consequenceof lack of sanitation. Understanding these government prioritiesand targeting research at them have proven successfulin the Indonesia case.Realigning accountabilityIncreasing clarity over institutional responsibilities can helpincrease accountability from both the supply-side (institutionsknow what they are responsible for) and the demandside(citizens know which institutions are responsible andwho they should complain to).Traditional top-down supply-driven approaches to sanitationinvestments have often been unsuccessful or unsustainable,but combining them with social investments in bottom-upprocesses can help increase accountability and the sustainabilityof investments even when there is low initial demand. TheCity Sanitation Strategy approach recognizes the differencebetween perceived demands, which often form the basis oftop-down approaches, and actual demands.Partnership strategyStrong longer term support and collaboration with governmenton planning and policy issues, with governmentviewed as a partner, can strengthen the capacity of government(central and local) to scale up sanitation planning andensure high levels of national ownership of the process. InIndonesia, this has been pursued through identifying andsupporting appropriate champions. These are trusted facilitatorsand negotiators who can help build and strengthenpartnerships and relationships among key stakeholders in theurban sanitation sector.Public debate and communicationAlthough the media in Indonesia are generally no more awareof sanitation issues than the general public and coverage islimited, there is potential to develop partnerships that enablesanitation messages to be conveyed effectively. The ISSDP hasrecognized this potential in the design of its second phase,which will have components on advocacy, campaigning,communications, and promotion.ConclusionsIn Indonesia a “process approach to engagement” has startedto pay dividends by increasing pressure for top-down sectorinvestment from the center of government and bottom-upfrom local government upward. There is increasing high-level64Global Practice Team of Sanitation

The Political Economy of SanitationAnnex B - Case study summariesownership within government (in contrast to some pastdonor/lender-funded projects, which have tended to havebeen supply driven) and very recent developments suggestthat the national budget for sanitation infrastructure is likelyto be quadrupled in 2010 and will have a separate budgetline from water. While the importance of process has longbeen recognized, the Indonesia case study highlights againthe importance and effectiveness of development partnersunderstanding the national and country context, and ensuringthe approaches fit this context.The Indonesia cases study clearly illustrates the appropriatenessand effectiveness of intensive informal approaches builton good personal ties and relationships. ISSDP key staffmet with counterparts from the Ministry of Public Works(MoPW) many times to convince them of the potential ofthe SSK approach, but during the first year, advocacy effortstoward MoPW were unsuccessful. The breakthrough camewhen an additional person was recruited within the ISSDPteam who was a formerly a very senior government officialwithin the Ministry of Home Affairs (MoHA) and had manyrelations both in MoHA and in other ministries, includingMoPW. He was also a former lecturer in a prestigious universityfrom which many MoPW staff had graduated. Throughintensive informal approaches (for example, breakfast anddinner meetings, coffee meetings, and informal gatherings)he led the advocacy activities and was successful in getting theattention and commitment of MoPW, at least up to directorgeneral level, and other government agencies and ministries.In some instances there were clashes between two directorgenerals, but through a series of additional informal meetingsthese were overcome. The year-long process was slowbut eventually led to the establishment of the Tim TeknikPembangunan Sanitasi (Technical Team for Sanitation Development,or TTPS) in November 2007 through a ministrydecree from Bappenas. Through the TTPS, interministerialrelationships among MoPW, MoH, Bappenas, MoHA, andMoF became more formalized.In addition to the shifting priorities at national level, therehave also been significant shifts within some local governments.The six cities involved in the first phase of the ISSDPproject have started some initiatives without continuedprompting from external stakeholders, creating a dynamicof their own and proving effective at putting pressure onthe national government from a subnational level. Localgovernment investment levels in some of these cities haveincreased from less than 1 percent of budget to between 3and 6 percent, a significant increase given the low startingpoint and other priorities.B.4 SenegalOverviewIn the 1990s, the Government of Senegal undertook majorreforms of its urban water supply and sanitation sector. Thegovernment’s strong commitment to reforms has resulted inSenegal’s water sector being regarded as a model of publicprivatepartnership in sub-Saharan Africa. Following thesereforms, observers have pointed to a significant higher profileof sanitation since 2000, with increasing investment levelsand a larger number of people gaining access to sanitationin urban areas.Donor investments play a crucial role in sustaining investmentsin Senegal’s urban sanitation sector. While governmentdata is likely to underestimate considerably the proportionof donor contributions, estimates by independentobservers point toward 90 percent. Both, World Bank andWSP are key external actors supporting Senegal’s urban sanitationsector. The Bank’s engagement in the wide-rangingwater and sanitation reforms in Senegal began with a decadelongWater Sector Project—a US$100 million IDA creditwas provided in 1995—followed by the Project Eau LongTerme. The latter includes the Sanitation Program for PeriurbanCommunities of Dakar (Programme d’Assainissementdes Quartiers Péri-Urbains de Dakar, PAQPUD), whichaims to bring onsite sanitation to poor peri-urban areas ofDakar. Relying on an output-based approach, PAQPUD hassupported the construction of 63,000 household sanitationfacilities by 2004, therefore surpassing its initial target of60,000 (by 2006) two years earlier than planned. Buildingon experience and mechanisms developed under the PAQ-PUD, a new World Bank/WSP-administered project wasagreed to in 2007: the Global Partnership on Output-basedAid (GPOBA), which would help poor households in poorareas of Dakar to install onsite sanitation. The outputs in thisGPOBA-funded sanitation project include not only the hardwareof sanitation facilities but, importantly, the “software”of support, education, and monitoring from independentagents, nongovernmental agencies, and community-basedorganizations.www.wsp.org65

The Political Economy of SanitationAnnex B - Case study summariesDiagnostic findingsThe analysis of the country context for urban sanitation inSenegal has resulted in a strong case for the complex relationshipbetween water and sanitation working to the advantageof both sectors. While often competing for resources, Dakarpolicy makers were convinced that one sector could not developwithout the other. The wide-ranging institutional reformsin the mid-1990s were characterized by well-developed andinnovative performance contracts for the water sector but theexclusion of the underdeveloped sanitation sector from thosecontracts. In hindsight, some observers justified the decisionto separate water from sanitation on the grounds that it gavegreater visibility to the traditionally neglected sanitation sector.However, the real driver for the institutional separationwas that, in order to make the water sector attractive forprivate investment, it needed to be separated from the farless attractive sanitation sector. These reforms provided thesanitation sector with the opportunity to develop institutionsseparately, enabling it to benefit from experiences in the watersector, such as private sector participation, carefully designedcontracts, and active community involvement in extendingand improving services. In a climate of strong support by thenew political leadership since 2000 (President Wade statedrepeatedly that “sanitation is a matter of dignity”), PAQPUDwas started in 2002, and sanitation services for the first timewere targeted at poor areas of Dakar outside of the reach ofthe existing sewerage network.The analysis of the political economy in terms of stakeholderinterests, influence, and incentives as well as the institutionalframework (sector arena) suggests that there is no powerfulopposition to increasing sanitation sector investments orconflicts between different levels of government, which oftencharacterize political economy factors in decentralizedsettings. Several factors contributed to the successful managementof the political economy, the most important beingsupport by the political elite and performance contracts thathave shaped stakeholders’ incentives and protected investmentsfrom adverse political economy impacts. Recently,the sanitation sector has followed the example by the watersector, and a performance contract was signed by the NationalSanitation Office (ONAS) and the Government of Senegal.The contract obliges the state to cover the financing gap ifONAS achieves certain performance indicators, includingthose for wastewater treatment, investment in the network(extension and rehabilitation), new connections and newonsite facilities, network maintenance, and financial management.The sector process analysis has shown that the World Bankplayed a crucial facilitation role during the WSS reform in the1990s. Using the window of opportunity emerging throughthe urgent need to solve the water supply problems in Dakar,the World Bank team played a pivotal role in translating ageneral will for reform into a vision for the sector. The teamalso carefully managed initial skepticism about reform andprivate-public partnerships. The process discussion alsohighlights the potential of civil society and community-basedorganizations in successfully creating demand for sanitationservices in poor communities, for example, by using entrypoints around solid waste collection, wastewater, and drainage—knownto be bigger concerns in peri-urban communitiesthan sanitation provision. Moreover, launched in 2005, theMillennium Drinking Water and Sanitation Program (PE-PAM) has successfully attracted investments—in particularfrom donors. While observers say that the PEPAM is biasedin favor of the water sector at the expense of sanitation,there is agreement that PEPAM meetings and reviews andprovide a platform for discussion among a range of actorsfrom government, the donor community, civil society, andprivate-sector organizations.Operational implicationsBased on the diagnostic discussion, a number of significantoperational lessons can be drawn from the Senegal casestudy in order to help to inform future World Bank/WSPinterventions.Timing, tailoring, and location of investment and operationsThe research has found evidence that it is crucial to recognizepolitical support and use windows of opportunity to pushfor reform. Both the institutional reform in the water andsanitation sector and the later PAQPUD occurred in a climateof political support, initially to solve the problem aroundwater supply and later to stress the importance of sanitationprovision. Moreover, well-linked World Bank staff basedin Senegal was able to identify champions of change andengage with them on a continuous basis. Formal and, moreimportantly, informal meetings built mutual understandingand trust and successfully prepared important decisionsand obtained government support for initially controversial66Global Practice Team of Sanitation

The Political Economy of SanitationAnnex B - Case study summariesreform aspects, such as the privatization of the state-ownedwater utility (SONEES) prior to 1996.Driven by the World Bank, PAQPUD (and subsequentlythe WSP/World Bank–managed GPOBA) for the first timebrought onsite sanitation and condominial systems to Dakar’surban poor, which had until then been excluded for the mostpart from the network-based service provision in the capital’scenter. Inspired by the success of the pilot, many engineershave acknowledged the merit of alternative means of sanitationprovision and became advocates of onsite sanitation.This shows that successful interventions can have a powerfuldemonstration effect; this may be particular important in anenvironment where the default for urban sanitation provisionremains the sewerage.Understanding the sector through rigorous analysisDonors and lenders have a comparative advantage in providingrigorous analysis to inform reform and sector choices.While in Senegal no explicit political economy assessmentwas undertaken, donors have successfully contributed toevidence and, subsequently, an informed sector debate.Studies—using national and international expertise—haveoffered policy choices to government stakeholders and contributedto the evidence base used during workshops toundertake institutional sector reform. See, for example, thetariff study by ONAS/Banque Européenne d’Investissement(2008).Realigning accountabilityAs outlined above, the carefully designed and contextuallyspecific contracts in the water and the sanitation sector providethe right incentives and strengthen accountability byunbundling the functions supporting investment decisionsand policy implementation. At the same time, performancecontracts, if designed well, have been shown to protect thesector from adverse political influence and vested interests.In order to strengthen accountability initiatives from the privatesector and from civil society more broadly (the demandside of accountability), PAQPUD and GPOBA have combinedtechnological choices around the hardware of sanitationfacilities with targeted information campaigns. While CSOsand the private sector are successful in creating demandfor sanitation investments, there are still few examples ofcitizens actively demanding better service provision. And ifdemands are made, they generally focus on waste collectionor rainwater drainage rather than sanitation in the narrowsense of the definition.Partnership strategyEvidence from the Senegal case study has shown that donorscan successfully facilitate reform if they have invested inlong-term and continuous engagement in order to build trustamong key stakeholders. Well-connected national donor staffcan play a crucial role in understanding the Government’sposition and carefully negotiating with the main stakeholders—bothsupporters and opponents of reform.While partnerships are built not solely through formalmeetings, carefully organized and facilitated workshops haveprovided a vehicle for presenting evidence on policy choicesand managing potential resistance to reform in order togenerate continuous engagement.Public debate and communicationPAQPUD and GPOBA have rightly acknowledged thatinvestment in communication is key to generating effectivedemand (and advocacy) for sanitation within low-incomecommunities. Discussions around wastewater and watersupply—usually more popular than sanitation—have beenshown to arouse household interest and can provide theplatform for discussions around improving sanitation provisionwith local communities and consumers. Championsof change and self-declared advocates often emerge fromwithin the communities and could further be targeted moreformally through donor-supported projects.ConclusionsIn Senegal, the World Bank played a crucial facilitationrole during the WSS reform in the 1990s. Using the opportunityemerging through the urgent need to solve watersupply problems in Dakar, the World Bank team helpedto translate a general will for reform into a vision for thesector while successfully managing initial skepticism aboutprivate-public partnerships and opposition from the stateownedwater utility, SONEES. This role was most visiblethrough the organization of a range of workshops that helpedto facilitate and provide clarification on various issues inorder to find agreement on the nature of contracts. Whilethe workshop was acknowledged by all stakeholders as theformal vehicle for the process, many discussions were heldwww.wsp.org67

The Political Economy of SanitationAnnex B - Case study summariesin between sessions and behind closed doors to discuss andreach agreements. In addition to the World Bank team inWashington, D.C., a national resident advisor, who was aformer a member of the Ministry of Water and Sanitationand had access to government stakeholders, drove these moreinformal consultations.Using its role as credible partner, the World Bank in collaborationwith the WSP successfully built on the existinginstitutions and increased their focus on sanitation sectorinitiatives. Through its support of PAQPUD, the WorldBank/WSP partnership for the first time brought onsitesanitation and condominial systems to Dakar’s urban poor,which until then had been excluded for the most part fromthe network-based service provision in the capital’s center.Inspired by the success of the pilot, many engineers haveacknowledged the merit of “alternative” means of sanitationprovision. While nobody doubts the demonstration effect,sustainability is still at risk once the program’s successorcomes to an end.68Global Practice Team of Sanitation

The Political Economy of SanitationAnnex C - Terms of referenceAnnex C - Terms of referenceGlobal Economic and Sector Work (ESW) on the politicaleconomy of sanitation in four countries1. Background and rationaleCurrently, 2.6 billion people worldwide live without access tobasic, “improved” sanitation. 20 A more systematic assessmentis needed to identify and address these political constraintsto improved sanitation for the poor.For this purpose, the Water and Sanitation Program (WSP,administered by the World Bank, in collaboration withvarious governments and other public and private partners)and the World Bank are conducting a Global Economicand Sector Work (ESW) Study on the Political Economyof Sanitation in Brazil, India, Indonesia, and Senegal. Thepurpose of the study is to help WSP and the World Bank—through a better understanding of the political economy ofsanitation—in their efforts to support partner countries anddevelopment practitioners in the design, implementation,and effectiveness of operations that aim to provide pro-poorsanitation investments and services to improve health andhygiene outcomes.Definition of terms: What do we mean by politicaleconomy of sanitation?The term political economy is subject to multiple understandingsand definitions. In its original use in academicliterature, it referred simply to the application of economicprinciples to the practice of public policy of nation-states. 21tested over the past six years, offers concepts, methods, andtools to analyze both the “winners and losers” in the provisionof sanitation services: Is there equity in the distribution ofthe impacts of development interventions, and what are thepowerful interests that may support or oppose those interventionsor capture related benefits. These are political economyissues. Hence, this work is able to draw on the PSIA approachwith its Conceptual Framework for the Political Economyof Reform, developed by SDV (see details in box C.1). 22This lack has been identified as a component of poverty thatcontributes to 2 million child deaths a year, reduced schoolattendance, and a fundamental deprivation of human dignity.According to the study Sanitation and Hygiene at the WorldBank (Kolsky, Perez, Vandersypen, and Jensen 2005), globalinvestment will have to increase to at least US$2 billion tomeet the MDG target. However, there is ongoing concernthat governments, at many levels, are not devoting enoughattention and resources to sanitation services. While there areno general figures showing on- and off-budget expendituresin the sector at regional levels, evidence at the country levelillustrates that investments and expenditures in sanitationare very low compared to those for water supply and otherinfrastructure services.Not only is there a lack of focus on sanitation generally, butexisting sanitation investments and service provision are notalways pro-poor. They often do not consider socioculturalfactors that play a role in sanitation, especially in remote ruralareas. Also, the role that private sector sanitation supply ordemand plays in people’s decision making about sanitation isoften not recognized adequately. Efforts to increase access toservice can benefit better-off urban residents at the expenseof urban poor, slum dwellers, or the rural population. Onthe other hand, there is a general consensus and evidenceon the economic and health benefits of adequate sanitationservices. Many documents suggest that governments’ limitedsanitation expenditures are determined largely by political20 By sanitation we mean the infrastructure and service provision required for the safe management of human excreta, for example, latrines, sewers, and wastewater treatment.Hygiene is the set of human behaviors related to safe management of excreta, for example, washing hands with soap or safe disposal of children’s feces.21 World Bank, 2006. World Bank’s Increased Focus on Basic Sanitation and Hygiene, Water Supply and Sanitation Feature Story #3. World Bank, 2005. Sanitation and Hygieneat the World Bank: An Analysis of current activities, Pete Kolsky, Eddy Perez, Wouter Vandersypen, Lene Odum Jensen. UNDP, 2006. Human Development Report 2006 -Overview of the Global Sanitation Problem, David Satterthwaite and Gordon McGranahan.22 Works by Adam Smith, David Ricardo, and Karl Marx were all presented under the rubric of «political economy.»www.wsp.org69

The Political Economy of SanitationAnnex C - Terms of referencerather than technical or economic constraints; there arecompeting demands for resources. 23 We follow the currentcommon understanding of political economy, as referring to interdisciplinarystudies that draw upon social and political theoryin addition to economic principles in order to understand howpolitical actors, institutions, and economic processes influenceeach other. The political economy of sanitation, therefore,refers to the political and economic processes and playersthat determine the extent and nature of sanitation investmentand service provision. Understanding and addressingthe political economy of sanitation consists of identifyingand addressing impacts, risks, opportunities, participatinginstitutions, various stakeholder interests that support oroppose the investment in sanitation services for poor andvulnerable groups, and the level of policy debate on sanitationinvestment and service provision.Focus of work: Poverty and Social Impact Analysis(PSIA) to assess equity and powerful interestsThis work is a unique, innovative way of looking at sanitationinvestments and service provision. It combines multipledisciplines to understand and manage the political economyof sanitation. The Poverty and Social Impact Analysis (PSIA)methodology, 24 This approach will support evidence-baseddecision-making and policy dialogue on sanitation investmentand service provision.The PSIA perspective views the social, economic, health,institutional, political, cultural, and historical context of sanitationas part of one system. A system consists of elements,processes, and positive or negative feedback mechanisms.When those are altered, they have direct and indirect, shortandlong-term effects on the entire system. This ESW work incorporatesthe understanding of sanitation access, collection, andtreatment as part of a whole system. The work further accountsfor the unequal distribution of costs and benefits of sanitationinvestment and service provision. Finally, decentralizationand private sector and community participation are oftenseen to increase the complexity of designing and implementingsustainable operations, as multiple stakeholders, institutions,and competing interests need to be addressed. To assess andaddress this complexity, this work considers upstream dialogueand engagement with local governments, the private sector,and civil society as entry points to the design of sustainablesanitation operations. (See, for example, experience with thetotal sanitation approach in South Asia).23 World Bank, 2003. PSIA User’s Guide; World Bank, 2005. TIPS; World Bank/OPM, 2008. The Political Economy of Policy Reform: Issues and Implications for Policy Dialogueand Development Operations. Report no. 44288-GLB. Washington, DC: World Bank.24 See World Bank 2003, A User’s Guide to Poverty and Social Impact Analysis. In 2004, the framework of «Tools for Institutional, Political and Social Analysis» was added to the PSIAapproach. See World Bank/OPM 2008, The Political Economy of Policy Reform: Issues and Implications for Policy Dialogue and Development Operations.70Global Practice Team of Sanitation

The Political Economy of SanitationAnnex C - Terms of referenceBox C.1 Poverty and Social Impact Analysis (PSIA): One approach tohelp better understand and address the political economy of sanitationPSIA is the analysis of the distributional impact of policy reforms on the welfare ofdifferent social groups, with a particular focus on poor and vulnerable groups. It isan approach to (i) understanding the impact of policy choices and public actions onpoverty and social outcomes; (ii) analyzing intended and unintended consequencesof policy interventions; (iii) considering tradeoffs between social costs and benefitsof policy change by assessing opportunities, constraints, and social risks; and (iv)designing appropriate mitigating measures and risk-management strategies whenadverse impacts are unavoidable. It further analyzes the political economy of reform—reform support and opposition—and the capture of benefits.PSIA recognizes the need to understand the likely impacts of policy adjustmentson poor and non-poor groups. It identifies stakeholder groups that have significantinfluence to (i) support or oppose policy change toward improved outcomes insanitation service provision and/or (ii) capture benefits of sanitation investmentsor service provision. It also analyzes institutions, impacts, risks, and opportunities.Finally, PSIA develops concrete policy measures to enhance opportunities andaddress risks and opposition.A PSIA approach allows one to combine sanitation sector expertise with economicand social analysis, drawing specifically on (i) institutional analysis—defined as the“rules of the game” that people develop to govern group behavior and interactionin political, economic, and social spheres of life; (ii) political analysis—defined asthe structure of power relations and the often-entrenched interests of differentstakeholders that affect decision making and distributional outcomes—and (iii)social analysis— defined as social relationships that govern interaction at differentorganizational levels, including households, communities, and social groups.The PSIA approach also allows one to combine analytical evidence with policydialogue to build coalitions for change toward increased public debate and policymaking that lead to pro-poor sanitation investment and service provision.Key elements of PSIA:• Asking the right questions (assessing the context)• Analyzing stakeholders (interests, influence), incentives, institutions (formal, informal),impacts, risks (including political economy ), opportunities, processes, andpolicy debates• Understanding transmission channels (price, access to goods and services, assets,employment, transfers and taxes, authority (e.g., decision-making power)• Gathering data and information to fill gaps• Enhancing positive and addressing negative impacts• Establishing monitoring and evaluation systems• Fostering a participatory process, policy debate, partnership, and coalitions forchange• Integrating risks into interventions (internalizing externalities) and promoting feedbackfor policy adjustmentAdapted from User’s Guide to Poverty and Social Impact Analysis (World Bank 2003); Tools for Institutional, Politicaland Social Analysis (TIPS) for Poverty and Social Impact Analysis (PSIA) (Holland 2007); and The PoliticalEconomy of Policy Reform: Issues and Implications for World Bank (World Bank 2008).Specifically, the work focuses on theanalysis and understanding of countrycontext, sector arena, and sector process,as well as on developing Actionsand recommendations. 25Country context comprises the historicaland sociocultural context; thepolicy, political, legal, and institutionalframeworks; and the power relations.Sector arena comprises institutionsand organizations, stakeholders andtheir economic and political interestsand perceptions, incentives, impacts,risks, and opportunities.Sector process comprises the buildingof coalitions for change throughdialogue, partnership, participation,communication, and leadership; theinteractions between players in the reformarena over time; and the leverageof WB/WSP operations.Actions include concrete recommendationsand tools for developmentpractitioners to enhance the design,implementation, and effectiveness ofsanitation operations, portfolios, andoutcomes.The unit of analysis is concrete WSP/WB sanitation operations in Brazil,India, Indonesia, and Senegal. Theapproach is to use the PSIA methodologyto combine multiple disciplines to lookat sanitation service provision fromboth the supply and demand side forthe following reasons. First, sanitationinterventions are often add-ons towater supply projects and often focus25 See annex 3 for a visual illustration.www.wsp.org71

The Political Economy of SanitationAnnex C - Terms of referenceon sound engineering, technical feasibility, and economicviability. 26 Third, some demand-driven interventions havefailed as institutional barriers prevent scaling-up and sustainability.This work examines the influence of vested interests on sanitationinvestment and service provision, both as opponentsand supporters for improved, pro-poor sanitation. Powerfulinterests may make investment decisions that sustain rentsand/or capture respective benefits from sanitation investmentdecisions. Influential stakeholders, however, can alsobe proponents for more and better sanitation, as is seen, forinstance, in the “total sanitation” experience in Bangladesh.The work also includes analysis of and recommendationsfor incentives, impacts, risks, opportunities, processes, andpolicy debates.The ESW work acknowledges (in line with existing sectorthinking) that it is crucial to tailor efforts to focus attentionon sanitation provision and investment to the local context. 27as well as upon those other interests that influence decisionsabout the process. The ESW resonates with the WSP 2006Sanitation-Global Practice Team retreat. 28 Comparativelyless focus is placed on the following: the special featuresand delivery aspects of sanitation; the influence of political,social, and cultural aspects on the design, implementation,or sustainability of sanitation interventions; or the political,social, and economic impacts that sanitation operationshave on different social groups, which can affect their supportof or opposition to decisions on sanitation investmentand service provision. Second, supply-driven, project-basedinterventions have often been unsustainable, as they stalledor even reversed when the project support ended. 29 Thework argues that “a central feature of most efforts must beto engage with the people that lack adequate sanitation, andto build on, or respond to their concerns and initiatives”(UNDP 2006, 30). 30 Respective discussions focused on theneed to make informed decisions on sanitation investmentand service provision that are based on empirical evidenceand that take a comprehensive sanitation perspective. Further,this work promotes the economic impact argument,where the lack of sanitation facilities is both a health and aneconomic concern.The ESW work promotes multidisciplinary analysis, methods,and tools. Findings will inform the policy dialogue witha wide range of stakeholders, including communities andhouseholds receiving the sanitation services. Hence, the workcombines social analysis, economic analysis, and operationaland KSL experience from the sanitation sector. The primaryaudience of this work will be development practitionersengaged in sanitation operations and policy debates. TheESW will inform the work of partner countries, CountryManagement Units, and Bank task teams of sanitationprojects, programs, and nonlending activities. By combiningapplied analysis and operational experiences, the work willinform the design, implementation, and assessment of suchlending and nonlending activities as investment projects,technical assistance activities, SWAPs, Development PolicyLoans / PRSCs, and Economic and Sector Works, includingSanitation Road Map papers, Country Assistance Strategies(CAS), and Country Economic Memoranda. The work willinform WB portfolio management and aims to enhance thefocus on sanitation during the CAS development process.2. Objective of this workThe overall objective of the consultancy is to deliver theESW, which includes design, primary and secondary datacollection and analysis, and report writing and disseminationin the four case study countries: Brazil, India, Indonesia,and Senegal. Specifically, the consultant firm is expected toconduct the work with a multidisciplinary consultant teamthat integrates both (i) in-depth local country knowledgewith (ii) expertise in social analysis and political economyof sanitation investment and provision in order to addresskey questions, such as the following:26 For instance, Water Aid (2003) highlights that sanitation is devalued by most governments and donors; sanitation solutions are generally not known or poorly understood;communities are rarely involved in policy, programming and innovation; sanitation impact on health and development is not clearly understood; institutional roles andresponsibilities remain confused at the country level; coordination within the sector and between sectors related to sanitation (water supply, public works, health, agriculture,education, etc.) remains weak and undermines sanitation development.27 Globally, sanitation projects have moved from supply- to demand-led approaches.28 OED report on Development Effectiveness (2005: vii) states that effectiveness can be improved by tailoring operations to the circumstances of each country and adapting strategiesto the local political economy.29 UNDP, 2006. Human Development, 30.30 World Bank, 2006. Sanitation, Wastewater and Hygiene Practice Retreat, 16 November.72Global Practice Team of Sanitation

The Political Economy of SanitationAnnex C - Terms of reference• Why are sanitation investments and service provisionnot given adequate priority in lending and nonlendingwork?• When such efforts are undertaken, why are they notstrategically targeted toward increasing access to sanitationfor the poor?Specifically, it is expected that the consultant firm will meetthe following five objectives:1. Apply and refine the Conceptual Framework on thePolitical Economy of Reform, developed by the WorldBank, based on the approach of PSIA, to the sanitationsector.2. Analyze the political economy of sanitation of theselected WSP and WB projects in Senegal, India(Maharashtra), Brazil, and Indonesia by working withrespective project leaders toa. Identify—through a social analysis perspective—which stakeholders (including vested interests),incentives, institutions, impacts, risks, opportunities,processes, and policy debates support oroppose sanitation investments and improved serviceprovision and why. The study should examinewhat drives these factors and what could be doneto increase support for pro-poor sanitation investmentsand service provision. The study should besensitive to the ways in which benefits of sanitationinvestments are, or could be, captured by variousstakeholders.b. analyze the historical context of the policy, legal,and institutional frameworks for and the socioculturalaspects of sanitation, in terms of constraintsand opportunities for pro-poor sanitation investmentand service provision.3. Generate lessons from actual operational experiencesand produce recommendations on how best to enhancesupport for evidence-based decisions in sanitationinvestment. These lessons and recommendations willaddress as appropriate how to overcome (i) oppositionand resistance to sanitation improvement programsand/or, (ii) the capture of benefits by powerful groups,which may be detrimental to the provision of sanitationservices to the poor.4. Contribute to raising awareness for sanitation and itspolicy debate through this work’s analysis and dissemination.5. Prepare the final documents (including the SynthesisReport) as enhancements to the global policy debateand the design and implementation of sanitationoperations through an operationally tested approachto the analysis of the political economy of sanitation.Such analysis and understanding will help to promotea stronger pro-poor focus and ultimately improvehealth and hygiene outcomes on the ground.3. Scope of workIt is expected that this ESW will be carried out by a consultantfirm having experts with both in-depth country knowledge ofthe four case studies and sanitation and sociopolitical skills.Responsible for team management and supervision of ESWimplementation, the firm’s project leader will supervise andguide its case study teams throughout the case study preparations,implementation, and reporting in order to deliverthe Synthesis Report. The firm is expected to conduct thework in close collaboration with WSP and World Bank staffthroughout the four phases of (1) desk review, (2) preparation,(3) applied research, and (4) Synthesis Report writing.Separately, the World Bank will hire an econometrician,and the consultant firm is expected to cooperate with thisconsultant. 31The work, excluding the economist’s work, will begin withan initial kick-off meeting with the firm’s project leader firmand the World Bank project leaders. This will help to developa common understanding of the project objectives, goals,process, outputs, and final deliverables. The meeting will alsohelp to agree upon a clear way forward on the implementationof this work. Output: meeting minutesPhase 1: Desk review, inception reportThe consultant firm will conduct an overall desk review on (i)the key political economy literature in the sanitation sectorin general; (ii) the main issues of the political economy of31 The hiring of an econometrician is contingent on extra funding. After the desk review, the firm’s economist and the econometrician, hired separately by the World Bank, shallcooperate on a set of hypothesis to test. The econometrician will define an experiment, prepare a survey, collect the data, and prepare some estimation. However, the scope of thework of the econometrician should be an add-on to the project and does not replace the task developed by the firm’s economist.www.wsp.org73

The Political Economy of SanitationAnnex C - Terms of referencesanitation in Senegal, Brazil, India, and Indonesia, based onthe collected country material; and (iii) overarching politicaleconomy issues regarding the WSP and WB projects in thosefour case study countries. This review includes economic,social, political, and sanitation data and perspectives. Thissecondary data analysis report will (a) document positive andnegative experiences with the political economy of sanitationin the literature and operations, (b) highlight challenges andopportunities for a better understanding and managementof the political economy of sanitation, and (c) draw on andtailor the Conceptual Framework to the political economyof sanitation. This desk report serves as background paperfor the firm’s case study teams.The firm’s project leader will deliver an inception report thatillustrates a refined study implementation plan.Outputs: desk literature report, inception report.Phase 2: Preparation of applied research: designof hypotheses, survey instruments, researchstratification, logisticsThe consultant firm will draw on the Conceptual Framework(based on the PSIA approach and tools) and the desk reviewto refine the overall study design that will guide its multidisciplinaryteams in the applied research phase. This workinvolves the following:1. Identification of case study specific hypotheses: The firm’sproject leader will develop case-study specific hypotheses,based on the desk review and the in-depth localexpertise of its sociopolitical, sanitation, and economicexperts, regarding the political economy of the casestudy countries in general and of the sanitation sectorand the WSP/WB operations in particular.2. Development of the overall survey instrument and subsequenttailoring to the case study context: First, the firm’sproject leader will draw on the Conceptual Frameworkand the sample research design questions (see TORannex 3) to develop the overall survey instrument,in close collaboration with the WB/WSP team. Thisoverall instrument will ensure comparability acrossall case studies for the later cross-country analysis andthe development of transferable lessons for operationaldesign, which the synthesis report will present.Specifically, the standard survey instrument includesthe qualitative analysis of stakeholders, institutions,impacts, risks, opportunities, processes, and policydebate via (i) key-informant interviews and (ii) focusgroup discussions. A suggested methodology for theresearch design can be found in TOR annex 3.Second, the consultant firm will tailor the standardsurvey instrument to the case studies’ context byadding case-study-specific sociopolitical and sanitationinformation and stratification, tapping into the countrycontext knowledge of its technical experts. Thiswill capture the country-specific political economycharacteristics (stakeholders, institutions, impacts,risks, opportunities, processes, and policy debates)that will be assessed and addressed viaa. key-informant interviews with central and localgovernment, parliament, private sector, civil societyorganizations, media, associations, donors andlenders; andb. focus group discussions with households and businesses.3 Applied research stratification and fieldwork logistics:With support from its case study teams, the firm’sproject leader will prepare the fieldwork logistics inthe four countries and determine the exact stratificationfor in-country data collection, tapping into thecountry context knowledge of the case study teams,each of which will include at least one sanitationexpert and one sociopolitical expert. The consultantfirm will select case-study-specific field sites in urban,peri-urban, and rural areas, as relevant, and preparethe case study fieldwork logistics to assess a sample ofthe WSP/WB project sites and a few nonproject sitesfor comparison and ensure that thesea. adequately reflect (i) the different types of sanitationinvestment and service provision and (ii) thefull socioeconomic spectrum of different socialgroups, including poverty and exclusion of certaingroups, ethnicity, religion, gender, geopoliticalissues; andb. are adequately stratified to capture the perceptionsof the different stakeholders and incentives, theinstitutions and organizations, a wider range ofdistributional impacts and equity considerations,a variety of risks and opportunities, processes, andthe policy debate.74Global Practice Team of Sanitation

The Political Economy of SanitationAnnex C - Terms of referenceOutputs: Case-study-specific hypotheses; overall survey instrument;case-study-tailored survey instruments; detailedstratification of data collection and field sites (reflecting thespectrum of different socioeconomic groups and types ofsanitation investments and service provision); overall andcase study specific logistics.Phase 3: Applied research (hypotheses testing) in fourcase study reportsThe consultant firm will conduct the applied research throughits multidisciplinary case study teams, which comprise at leastone sanitation and one sociopolitical expert per case study inSenegal, Brazil, India, and Indonesia, and deliver four casestudy reports. Specifically, the consultant firm will draw onthe Conceptual Framework to carry out the field research,ensuring that its multidisciplinary teams• apply the case study survey instrument to collect thequalitative data, using social analysis techniques for keyinformantinterviews and focus group discussions;• analyze the qualitative and quantitative data; and• deliver the four case study reports that reflect distinctsocial, political economy and sanitation perspectives.The consultant firm is expected to conduct this fieldworkin two types of study cases: (i) WB and/or WSP sanitationprojects that have positive experiences with understanding andmanaging the political economy of sanitation, and (b) WBand/or WSP sanitation projects that request assistance for abetter understanding and managing the political economy ofsanitation in order to move the operation forward.1. For projects with positive experience (Brazil, Senegal,India), the case study teams will assess the politicaleconomy of sanitation to learn how the projectsa. had identified the support and opposition to sanitationinvestment and service provision, captureof benefits, andb. have managed to overcome opposition and/orcapture of benefits in their project design andimplementation (as relevant).The case study teams will collect and analyze data andproduce three detailed case study reports. It is expectedthat these reports willc. illustrate the analysis of stakeholders, institutions,impacts, risks ,and opportunities, as well as theprocesses and policy dialogue, which the WSP/WB projects have used to (i) better understand andmanage the political economy of sanitation and (ii)have a more equitable and sustainable operationaldesign and implementation; andd. provide respective lessons and recommendationsfor development practitioners.Outputs: applied research and three detailed case studyreports with project lessons and recommendations fordevelopment practitioners; and in-country disseminationmeasures.2. For projects requesting assistance (Indonesia), thecase study team will assess the political economy ofsanitationa. to learn which factors constrain the project designor implementation (as relevant) andb. develop operational recommendations for both,the project and the policy level to overcome currentoperational constraints and improve effectiveness.The study team will collect and analyze data and producea detailed case study report. It is expected thatthis report willc. illustrate which stakeholders, incentives, institutionalbarriers, risks, and processes exist that hamperproject design/ implementation (as relevant) andwhich powerful interests may sit on rents or capturebenefits, andd. provide recommendations on concrete measuresthat need to be put in place to overcome oppositionand/or capture of benefits, as well as improve thepolicy dialogue to enhance project performanceand effectiveness.Outputs: applied research and a detailed case study reportwith recommendations for (i) project improvement indesign or mid-course corrections for project implementation(as relevant), (ii) enhanced policy dialogue, and (iii)recommendations for development practitioners; in-countrydissemination measures.www.wsp.org75

The Political Economy of SanitationAnnex C - Terms of referencePhase 4: Synthesis Report, disseminationThe firm’s project leader is responsible for producing, deliveringand disseminating the Synthesis Report. The report willbe based on the applied and refined Conceptual Framework,the case study reports, inputs from the firm’s technical experts,and the cooperation with the separately hired econometricianconsultant. The project leader will deliver a draft report forreview by the World Bank, and incorporate all commentsand feedback into the final report. Specifically, it is expectedthat the Synthesis Report will• consolidate the four case study experiences and reportsthrough a cross-country case study analysis,• generate common lessons from the operational caseexperiences on how to better understand and managethe political economy of sanitation by refining theConceptual Framework to the political economy ofsanitation, and• translate the generated body of analytical and operationalknowledge into concrete operational recommendationsand guidance that development practitionerscan apply to their sanitation work (including inputs toPADs, CASs, etc). The purpose is to help them enhancethe policy dialogue and the design, implementationand performance of sanitation operations that (i)emerge from evidence-based decisions for sanitationinvestment and service provision, (b) have a strongerpro-poor focus, and (c) contribute to improved healthand hygiene outcomes on the ground. This will directlyinform operational design.The project leader will submit an annotated outline of theSynthesis Report for comments and agreement to the WorldBank. He/she will then write the draft Synthesis Report,and after incorporating all World Bank comments, finalizethe Synthesis Report and submit it to the World Bank forapproval. Upon finalization, the Synthesis Report will bedistributed among the respective stakeholders and resultsdisseminated in case study countries. The firm’s project leaderwill work closely with WB/WSP staff throughout the draftingof the report, and dissemination.Outputs: draft reports, and final Synthesis Report; in-countrydissemination4. Expected level of effortThe expected level of effort is a total of 31 staff weeks.5. Time frame for implementationIt is expected that the contract will be signed by June 2008and implemented through April 2009.6. Outputs and delivery scheduleMilestonesUpon signature of contractInception reports and desk reviewDesign of hypotheses, surveyinstruments, applied researchmaterial, and logisticsApplied research implementationand case study reportsDraft Synthesis ReportFinal Synthesis ReportOutputsDescription10% of total allocation10%15%35%10%20%7. Payment termsThe consulting firm will be hired on a lump sum basis. Paymentswill be made in six installments as follows.Minutes of kick-off meetingInception report and deskliterature reportCase study specifichypothesesOverall survey instrument andcase-study-tailored surveyinstrumentsDetailed stratification of datacollection and field sites;overall and case-study-specificlogisticsFour detailed case studyreports as a result of appliedresearchDraft Synthesis ReportFinal Synthesis Report,in-country disseminationDelivery schedule (# ofweeks after signing ofcontract1 week3 weeks7 weeks10 weeks12 weeks28 weeks32 weeks37 weeks76Global Practice Team of Sanitation

The Political Economy of SanitationAnnex C - Terms of reference8. Qualification and experience requirementsThe consultancy requires the following qualifications andexperiences. Further details can be found in TOR annex 2.Essential Skills and experience• Masters degree or better in social sciences (sociology,political science, economics) and sanitary, environmentalor civil engineering, public administration,etc.• A track record (minimum eight years) of applied researchand operational experience with the political,social, economical, and institutional aspects of sanitationin developing countries, particularly Senegal,India, Brazil, and/or Indonesia. Previous experiencein at least two of these countries is essential.• Proven track record on political economy work indeveloping countries from a sociopolitical as well asoperational perspective.• Experience with understanding and managing thepolitical economy of sanitation investment andservice provision at the policy and operational level,combining political, social, economic, and sanitationperspectives.• Demonstrated track record in collecting primarysociopolitical, institutional, economic, and sanitationdata through fieldwork, as well as in processing andanalyzing multidisciplinary primary and secondary sociopoliticalinformation and data using cross-countrycomparative case study methods.• Proven track record in translating analytical findingsinto recommendations for operations and policies.• Excellent report skills, as well as excellent Englishlanguage skills (both speaking and writing).• Track record of project and team managementskills.• Ability to contract and manage consultants with sociopoliticaland sanitation expertise in Senegal, India,Brazil, and Indonesia.• Ability to work in English, French, Portuguese, andIndonesian, or the ability to contract and manageconsultants who can.Desirable Skills and experience• Experience in working in Senegal, India, Brazil, andIndonesia• Capacity to work in several countries simultaneously.• Previous experience with the Water and SanitationProgram.• Previous experience with World Bank operations.9. Working linkages with the World BankThe team will report to Eduardo Perez eperez1@worldbank.org, Sabine Beddies sbeddies@worldbank.org, Peter Kolskypkolsky@worldbank.org, and Daniel Benitez dbenitez@worldbank.org,who oversee and supervise the consultancy. Thefirm’s project leader will report regularly on progress of thework by submitting drafts of the survey instruments, appliedresearch material and case study progress, and reports to theWorld Bank for review. For the case study progress reports,the firm’s project leader will mention any problems identifiedand solutions developed to address them. The team willsubmit all outputs to the World Bank for review, comments,and approval in English in electronic version available in MSWord format and as PDF files.www.wsp.org77

Annex 1: Overview of Activities, Roles, and OutputsInvolvement of/inFirm’s ProjectLeaderFirm’ SanitationSpecialist(s)Firm’s SociopoliticalSpecialist(s)Firm’s EconomistOutputsTeam MeetingKick-off PhaseDiscuss and agree upon consultancy objectives, focus and scope ofwork, interim outputs, and deliverableMeeting MinutesTeam roleTeam management andsupervision of studyimplementationTeam membership to deliver the country case studies5.23Compile and deliverdesk review reportPHASE 1: DESK REVIEW AND INCEPTION REPORTCompile country-specific background informationDesk Literature Report5.25Inception ReportPHASE 2: PEPARATION OF APPLIED RESEARCH:DESIGN OF HYPOTHESES, SURVEY INSTRUMENTS, RESEARCH STRATIFICATION, AND LOGISTICSDesign casestudy-specifichypotheses- Based on deskreview, generatetestable hypothesisDeliver ideas for potential hypothesesCase-study-specifichypotheses- Decide on themethods used fortesting hypothesesDevelopoverall surveyinstrumentTailorinstrument tocase studycontext- Design of overallstudy framework andmaterial- Tailor overall surveyinstrument andmaterial to countrycasesTailor overall, standard survey instrument and material tocountry casesStandard surveyinstrument5.26Case-study-tailoredsurvey instrumentsDetailedstratification ofdata collectionand field sitesOverall andcase-studyspecificlogistics- Detailed stratificationof data collectionand field sites- Preparation of overalland case-studyspecificfieldworklogisticsProvide country and technical expertise to help developthe detailed stratification of data collection and field sitesProvide country expertise to help develop the case studyspecific fieldwork logisticsDetailed stratificationof data collection andfield sites (differentsocioeconomicgroups & sanitationinvestments/services)5.27Overall fieldworklogistics,case study specificlogistics5.285.295.305.315.32Continued78Global Practice Team of Sanitation

The Political Economy of SanitationAnnex C - Terms of referenceAnnex 1: Overview of Activities, Roles, and Outputs CONTINUEDInvolvement of/inFirm’s ProjectLeaderFirm’ SanitationSpecialist(s)Firm’s SociopoliticalSpecialist(s)Firm’s EconomistOutputsPHASE 3: APPLIED FIELD RESEARCH (HYPOTHESIS TESTING) IN FOUR COUNTRIES AND REPORTSApplied researchof WB/ WSPsanitationprojects (a)with positiveexperiencesof and (b)requestingassistance forunderstandingand managingthe politicaleconomy ofsanitation inSenegal, Brazil,India, andIndonesiaManage itsmultidisciplinaryteams to implementthe applied researchand deliver four casestudy reportsCarry out fieldwork (applying surveyinstruments) to- collect the qualitative data, usingsocial analysis techniques forkey-informant interviews and focusgroup discussions,- analyze data,- deliver the four case studyreports that reflect distinct social,political economy, and sanitationperspectivesno fieldworkData collection andanalysisFour detailed casestudy reportsPHASE 4: SYNTHESIS REPORT AND DISSEMINATIONDraft Report,Final SynthesisReport- Produce and deliverdraft report to WorldBank team for reviewand commentsDeliver inputs to project leader uponrequestDraft Synthesis ReportFinal Synthesis reportIn-countrydissemination- Revise and finalizereportOrganize and hold dissemination incountryIn-countrydissemination- disseminationsupervision amongrelevant stakeholdersin-countrywww.wsp.org79

The Political Economy of SanitationAnnex C - Terms of referenceAnnex 2: Required Team Skills and ExpertiseFirm’s ProjectLeaderFirm’ SanitationsSpecialist(s)Firm’s SociopoliticalSpecialist(s)Required Qualifications (Education and Experience)Firm’s Economist(Post)Graduate degreein social sciences,preferably sociology,political science witha minimum of eightyears operationalexperience, preferablyin sociopolitical work(research, projects),international institutions,applied researchMasters’ degree in civilengineering, preferablysanitary or environmentalspecialty, with a minimumof eight years operationalexperience with a focus ontailoring sanitation servicesto the needs of the poor,and with familiarity withthe associated institutionalissues(Post)Graduatedegree in sociology orpolitical science, witha minimum of eightyears of operationalexperience, preferably insociopolitical, institutionalwork, applied research(Post)Graduatedegree ineconomics, with aminimum of eightyears of operationalexperience,preferably insocioeconomic,political, andinstitutional work,applied researchRequired ExpertiseJobpurpose- Responsibility formanaging the project,including supervision ofprocess and guidanceto multidisciplinaryteams- Responsibility fordelivering final reportand disseminating it- Reports back to WorldBank team- Manages projectbudget- Contributes (i) in-depthcountry knowledge and (ii)strong technical expertiseto the multidisciplinaryteam throughout studydesign, implementation,analysis, and report writing- Carries out responsibilitiesof fieldwork, analysis,and report writingindependently but as partof a team, and deliversinputs and outputs tothe work of the projectleader (including SynthesisReport)- Contributes (i) in-depthcountry knowledge,(ii) political economyexpertise, and (iii)strong technicalexpertise to themultidisciplinaryteam throughoutstudy design,implementation,analysis, and reportwriting- Carries outresponsibilities offieldwork, analysis,and report writingindependently but aspart of a team, anddelivers inputs andoutputs to the workof the project leader(including SynthesisReport)- Contributes (i)in-depth countryknowledge, (ii)political economyexpertise and (iii)strong technicalexpertise to themultidisciplinaryteam throughoutstudy design,implementation,analysis, andreport writing- Analyzes fieldworkdata collectedby sanitation andsociopoliticalexperts anddelivers inputsand outputs to thework of the projectleader (includingSynthesis Report)RequiresinteractionwithWorld Bank staff andcountry officialsCounterparts in WSP/WB sanitation projects,government, private sector,civil society, and WB teamCounterparts in WSP/WB sanitation projects,government, privatesector, civil society; andWB teamCounterpartsin WSP/WBsanitation projects,government, privatesector, civil society,and WB teamContinued80Global Practice Team of Sanitation

The Political Economy of SanitationAnnex C - Terms of referenceAnnex 2: Required Team Skills and ExpertiseFirm’s ProjectLeaderFirm’ SanitationsSpecialist(s)Firm’s SociopoliticalSpecialist(s)Firm’s EconomistEssentialspecializedskills, knowledge,andcompetencies- Proven knowledgeof political economyissues of sanitation indeveloping countries- Track record of projectand team managementskills- Excellent skills insociopolitical analysisand cross-countrycomparative casestudy analysis- Proven track recordin translatinganalytical findings intorecommendations foroperations and policies- Excellent English reportpreparation skills- Ability to contract andmanage consultantswith sociopolitical andsanitation expertise inSenegal, India, Brazil,and Indonesia- Ability to work inEnglish, French,Portuguese, andIndonesian or ability tocontract and manageconsultants who can- Understanding of thepolitical economy ofsanitation investmentand service provision atoperational level (preferablyalso at policy level)- Demonstrated track recordin collecting, processing,and analyzing primary andsecondary sanitation andeconomic data throughfieldwork- In-depth knowledge of localconditions in sanitationand hygiene sector, withoperational experience incase study country(ies)- Proven ability to integratetechnical sanitation skillsinto multidisciplinaryteam work, and crosscountrycomparative casestudy analysis, includingtranslating analytical findingsinto recommendations foroperations and policies- Excellent English reportpreparation skills- Knowledge of officialcountry language is highlydesirable- Proven expertisein assessing andaddressing politicaleconomy issues atboth the policy andoperational levels.Experience withsanitation sector is aplus- Demonstrated trackrecord in collecting,processing, andanalyzing primaryand secondarysociopolitical,institutional, andeconomic data throughfieldwork- In-depth knowledgeof local political,institutional, social,cultural, andhistorical context withoperational experiencein case studycountry(ies)- Proven ability tointegrate technicalskills sociopoliticalskills intomultidisciplinary teamwork and crosscountrycomparativecase study analysis,including translatinganalytical findings intorecommendations foroperations and policies- Excellent English reportpreparation skills- Knowledge of officialcountry language ishighly desirable- Proven expertisein assessing andaddressing politicaleconomy issues atboth the policy andoperational levels.Experience withsanitation sector isa plus- Demonstrated trackrecord in collecting,processing, andanalyzing primaryand secondarysocial, political,institutional, andeconomic datathrough fieldwork- In-depth knowledgeof local political andeconomic contextwith operationalexperience in casestudy country(ies)- Proven abilityto integrateeconomic skills intomultidisciplinaryteam work, andcross-countrycomparativecase studyanalysis, includingtranslating analyticalfindings intorecommendationsfor operations andpolicies- Excellent Englishreport preparationskills- Knowledge ofofficial countrylanguage is highlydesirableGeneralcompetencies- Ability to managemulticultural teams andprojects- Effective verbal andwritten communicationskills- Strong verbal and writtenEnglish communication skillsand strong verbal skills inthe languages in which theconsultant will be working- Works effectively inmultidisciplinary andmulticultural team(s)- Effective verbal andwritten communicationskills- Works effectively inmultidisciplinary andmulticultural team(s)- Effective verbaland writtencommunicationskills- Works effectivelyin multidisciplinary,and multiculturalteam(s)www.wsp.org81

The Political Economy of SanitationAnnex C - Terms of referenceAnnex 3: Research DesignAs highlighted in section of annex C (“Background andrationale”), this ESW is a unique, innovative way of lookingat sanitation investments and service provision. It combinesmultiple disciplines to understand and manage the politicaleconomy of sanitation. As the PSIA methodology (Kolsky,Perez, Vandersypen, and Jensen 2005; World Bank 2003,2007), 32 tested over the past six years, offers concepts,methods, and tools to assess both, the equity and politicaleconomy of reforms, this work is able to draw on thatexperienced approach to apply and refine the ConceptualFramework for the Political Economy of Reform to thesanitation context in order to assess and address “winnersand losers,” supporters and opponents, and the capture ofthe benefits of sanitation operations (investment and serviceprovision). Below are some suggested sample questions thatthe firm’s project leader may use as research design to developthe standard and case-study-specific survey instruments.1. Country context (historical, policy, political, legal,institutional, sociocultural), and power relations:What is the cultural and historical background tosanitation? What is considered “adequate sanitation”in each country? What are the sociocultural drivers foror constraints to improved sanitation? Which policylevel and which entity makes decisions on sanitationinvestment and service improvement?a. Why do some countries not invest in sanitation atlocal, regional, and national levels? What are thereasons argued in each country? How is sanitationcovered in national policy (for example, WSS, urban/ruraldevelopment, health policy, etc)? Whatpolitical economy factors can be determined toinfluence the level of sanitation investment. Forexample, do projects yielding instantaneous payoffsdominate the sanitation agenda? Are national decisionson sanitation investment affected by electoralcycles? What are the politics of the policy makingprocess?b. How do countries that do invest, make decisions onwhere, when, and what to invest in? Why do somecountries invest so much money in treatment workswhen so few people in the area have basic accessor a connection to the sewer? Why do IFIs subsidizesewerage at 100 percent, but onsite sanitation isassumed to be at the cost of the household? Whatreally determines which urban and/or rural areasget selected for sanitation improvements? How isinvestment in sanitation perceived by households,central government, local government, privatesector, civil society, and international donors andlenders? What are the processes that determine theanswers to these questions? Who decides what, andhow can we inform/influence the process mosteffectively? 332. Institutions: What are the institutional structural andsystemic constraints to (i) increasing allocations to sanitationin the national budget (of the case study country);(ii) planning sanitation infrastructure; or (iii) constructingand maintaining sanitation infrastructure?3. Stakeholders: Which stakeholders have power over(i) decision-making about access, collection, treatment(including type of sanitation service provision—wet,dry), investment (central government, local government,private sector, civil society, international donorsand lenders); (ii) regulation; (iii) implementation,investment, and maintenance? What common governanceproblems to planning and implementation doessanitation share with other infrastructure provisioning,for example, water supply? How does decentralizationaffect sanitation?4. Access: How do households manage and treat theirsewage (pit latrines, septic network, etc.)? Do householdshave choices regarding different sanitation options?What incentives exist for households to connectto sanitation networks (if this option exists)? Howare these incentives perceived by households, centralgovernment, local government, private sector, civilsociety, and international donors and lenders? Whatare the real and/or perceived benefits to households,local government, central government, private sector,32 World Bank (2003, 2005, 2007).33 Some experience shows that the Ministry of Finance rather than line ministries make sanitation decisions.82Global Practice Team of Sanitation

The Political Economy of SanitationAnnex C - Terms of referencecivil society, and internationaldonors and lenders?5. Price and subsidies: Whatis the willingness to pay forsanitation and how affordableis it? Who pays to meet costs/recovery? Subsidies, taxes forhouseholds, service providers,local government, private sector,communities6. Assets: Who owns/maintainswhat assets (land, wastewatertreatment plant, network, etc.)?How are networks establishedand expanded, and what are theprocesses for connecting newHouseholds?7. Employment: Are there employmentissues to consider (gain/loss)?8. Policy dialogue: What is thelevel of debate on sanitationinvestment and service improvements(access, collection,treatment)? Is this debatepublic—where is it conducted?What are the reasons for a debatethat is not public?Figure C.2 Political economy frameworkDIAGNOSTIC FRAMEWORKSource: World Bank/OPM 2008.REFORM CONTEXT- Economic, social, political and institutionalcontext, at the sector and national level.- Scope of proposed policy reform(reform agenda).REFORMARENAStakeholders&InstitutionsEconomicInterest(rents, assetcapture,etc.)PoliticalInterest(authority,clientelism,etc.)REFORMPROCESSDialogue &Decision-MakingChampions &OpponentsDevelopmentPartner InfluenceACTION FRAMEWORKTiming, Tailoring,Sequencing ofreforms/operationsLending InstrumentsAnalysisRigor, M&ETransparency(Dissemination)RealingAccountabilityDemand & Supply-SidePartnership Strategy- Decision Makers- AlliesPublic Debate &CommunicationStrategyDesig &Implementationwww.wsp.org83

The Political Economy of SanitationAbbreviationsAbbreviationsBCONABDIBAESBEASEANASSEMAEBNDESCAESBCAIXACBOCLTSCSODFIDEMBASAESWFUNASAGPOBAIFIISSDPM&EMDGNGONPGAssociação Brasileira das Concessiónarias Privadas dos Serviços Públicos de Água e Esgoto (Brazilian Associationof Private Water and Sanitation Operators)Associação Brasileira de Infra-Estrutura e Indústrias de Base (Brazilian Infrastructure and Heavy IndustryAssociation)Associação das Empresas de Saneamento Básico Estaduais (Association of State Sanitation Companies,Brazil)Association of Southeast Asian NationsAssociação Nacional dos Serviços Municipais de Saneamento (National Association of Municipal SanitationServices, Brazil)Banco Nacional de Desenvolvimento Econômico e Social (National Bank for Economic and Social Development,Brazil)Companhia de Saneamento Ambiental do Distrito Federal (Environmental Sanitation Company of theFederal District, Brazil)Caixa Econômica Federal (Federal Savings Bank, Brazil)Community-based organizationCommunity-led Total SanitationCivil society organizationDepartment for International Development (UK)Empresa Bahiana de Águas e Saneamento (Water and Sanitation Company of Bahia, Brazil)Economic and Sector WorkFundação Nacional de Saúde (National Health Foundation, Brazil)Global Partnership on Output-Based AidInternational financial institutionIndonesian Sanitation Sector Development ProgramMonitoring and evaluationMillennium Development GoalNongovernmental organizationNirmal Gram Puraskar (Clean Village Award, India)84Global Practice Team of Sanitation

The Political Economy of SanitationAbbreviationsONASOPMPACPAQPUDPEPAMPFLPLANASAPMDBPMMSOffice National de l’Assainissement du Sénégal (National Sanitation Office, Senegal)Oxford Policy ManagementPrograma de Aceleração do Crescimento (Growth Acceleration Program, Brazil)Programme d’Assainissement des Quartiers Péri-Urbains de Dakar (Sanitation Program for Peri-urban Communitiesof Dakar, Senegal)Programme d’Eau Potable et d’Assainissement du Millénaire (Millennium Drinking Water and SanitationProgram, Senegal)Partido da Frente Liberal (Liberal Front Party, Brazil)Plano Nacional de Saneamento (National Water Supply and Sanitation Plan, Brazil)Partido do Movimento Democrático Brasileiro (Brazilian Democratic Movement Party)Programa de Modernização do Setor Saneamento (Water Sector Modernization Project, Brazil)PROSANEAR Programa de Saneamento para Populações em Áreas de Baixa Renda (Sanitation Program for Low IncomeAreas)PSDBPSIAPTSNSAPartido da Social Democracia Brasileira (Brazilian Social Democracy Party)Poverty and Social Impact AnalysisPartido dos Trabalhadores (Workers’ Party, Brazil)Secretaria Nacional de Saneamento Ambiental (National Secretariat for Environmental Sanitation, Brazil)SONEES Société Nationale d’Exploitation des Eaux du Sénégal (state-owned water utility prior to 1996)SONESUNDPUNICEFWBWHOWSPWSP-EAPWSSSociété Nationale des Eaux du Sénégal (state asset-holding company, Senegal)United Nations Development ProgramUnited Nations Children’s FundWorld BankWorld Health OrganizationWater and Sanitation ProgramWater and Sanitation Program—East Asia and the PacificWater supply and sanitationwww.wsp.org85

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