Publication: Water, Electricity, and the Poor : Who Benefits from Utility Subsidies?
Date
2008-10
ISSN
Published
2008-10
Author(s)
Abstract
Utility subsidies to consumers of water
and electricity services are often justified as a mechanism
for making services affordable for the poor. After all, an
estimated 1.1 billion people in the developing world lack
access to safe water, 2 billion are without electricity, and
2.4 billion without sanitation. But critics object that such
subsidies can work against improving quality of service to
existing consumers and extending access to unconnected
households. Financially strapped utilities are often
inefficient, provide low-quality services, and lag behind in
expanding networks. During the 1990s, experts urged that
water and electricity services should charge enough to fully
cover costs. Households could spend 10-50 percent more on
water and electricity without major effects on poverty
levels, but in many countries much larger price increases
are needed to recover costs. A substantial proportion of the
population of lower income countries may find it difficult
to pay the full cost of services.
Citation
“Komives, Kristin; Foster, Vivien; Halpern, Jonathan; Wodon, Quentin; Abdullah, Roohi. 2008. Water, Electricity, and the Poor : Who Benefits from Utility Subsidies?. Water P-Notes; No. 20. © World Bank, Washington, DC. http://openknowledge.worldbank.org/handle/10986/11745 License: CC BY 3.0 IGO.”