Most of the 2.5 billion people lacking access to improved sanitation today, are poor. It is also increasingly clear that improved sanitation has impacts that go way beyond having a safe place to defecate, including improved health, dignity and privacy, and general empowerment. Most people would agree that there are strong reasons why people should not live in filthy and unhealthy environments, and that the poor and vulnerable should be supported to obtain sanitation services in ways that promote social equity, are people-centred, participatory and affordable. In the discussion on who is going to pay for this, many people make a short leap to a strong argument for the use of hardware subsidies.

This is based on two assumptions: first, that it is lack of funds that forms the primary barrier to access for the poorest, and second, that the use of hardware subsidies is an effective way of removing this barrier. However, the discussion on appropriate sanitation financing mechanisms for the poor should go far beyond the use of hardware subsidies, and take into account all aspects of hardware and software, capital and operational expenditure, the type of sanitation system being built, and the ultimate users of the sanitation system. Without this, the discussion risks becoming over-simplified and dogmatic, based on emotion rather than rational argument.

'Neutralise' the sting of the debate

To contribute to this discussion and to 'neutralise' the sting of the debate, WSSCC has developed 'Public Funding for Sanitation: The Many Faces of Sanitation Subsidies'. This primer aims to assist the reader to understand the global debate on subsidies and sanitation financing; and to provide guidance on how to select the most appropriate funding arrangements in different situations: To begin with, there is a need to better understand how public funding of sanitation works. What needs to be financed? What are the main sources of financing? What is meant by public finance and by subsidy? Are there some broad concepts and principles for the allocation of public funds that all can agree to? The primer suggests taking as a starting point the principle that the most efficient use of public funds is to maximise public benefits (those that are shared by everyone), and that public funds should not be used to finance essentially private elements (such as soap, individual latrines, etc.) for which people are willing and able to pay and when private and market-based funds are available.

Get clarity on the many types of subsidies

The debate focuses mainly on one particular form of subsidy: hardware or infrastructure subsidy. It is important to get clarity on the many types of subsidies that are currently used in sanitation, their advantages and disadvantages and applications, and to further explore the issue of financing software activities. The choice of financing mechanism depends on the type of sanitation system that is being put in place and it helps to explore real-life options and examples. For example, the options for financing a programme for building and operating rural pit latrines differ from the options available for the construction and maintenance of an urban sewerage system.

Stronger focus on software aspects

Finally, the document argues that a stronger focus on software aspects, such as hygiene promotion and the enabling environment, has the potential to encourage a large increase in both market-based and household/community spending, as illustrated by approaches such as community-led total sanitation (CLTS) and sanitation marketing. In the final analysis there is no single ‘right’ answer to the design of financing arrangements for sanitation. The argument put forward is that the design of financing arrangements (including subsidies in all their forms) should be based on sound empirical evidence and clear policy objectives. Investing in informed policy debate up front may result in a much more efficient use of scarce public funds and, ultimately, to better access to sanitation for all.

The primer 'Public Funding for Sanitation: The Many Faces of Sanitation Subsidies' is available at www.wsscc.org.

For more information, please contact Ms. Carolien van der Voorden, WSSCC Networking and Knowledge Management Programme Officer, e-mail

Tags: advocacy, financing, governance, policies & legislation, sanitation