Competition in Water and Sanitation : The Role of Small-Scale Entrepreneurs

Abstract

In water and sanitation there has always been a belief that the sector has a high degree of natural monopoly. But competition is widespread at the low-income end of the retail level in developing countries. There are no inherent monopoly characteristics in, for example, reselling water by bucket. This Note explores the diversity of small scale entrepreneurs and their role in meeting unserved niches of the water and sanitation market. Indeed, small enterprises often account for a larger share of the market than incumbent utilities and they are well placed to complement and even compete with trunk concessions and public companies in tailoring service to the poor. So in designing concessions or any long term rules for the sector, governments should take account of existing or potential small providers.