| | How did 2 billion people gain access to WASH over the past 25 years? Dominick de Waal, Senior Economist, WSP, Water Global Practice UNC Water and Health Conference

Building on a paper written here in UNC Universal access to drinking water: the role of aid Looks at the relationship between aid and drinking water access gains over the period 2000 to 2010 Data sources used –OECD CRS database –JMP database –Econometric analysis Robert Bain, Rolf Luyendijk and Jamie Bartram 1

Paper concluded … “Longitudinal analysis shows no detectable effect of volume of aid on progress.” 2

Outline 1.Why is it difficult to make links between sector aid and sector progress? 2.What tools and instruments do we have to influence progress through aid? 3.How could we use these tools and instruments better? 3

75% of MDG progress in just 18 countries 4 50% driven by China and India 25% by next 16 countries 3.3m less people have access in Somalia today than in people gained access in Tuvalu

Wide range of country outcomes for aid spent 5 $2804 $9 $1

Back to the Future: Using MDG costing models retrospectively To estimate what was spent (from all financial flows) … … given actual progress made by a country over the MDG period 6 Source: Global Water Supply and Sanitation Report In: Hutton G, Haller L (2004)

How much could aid volumes have contributed to progress over MDG period? 7 Lots of variation!

The paper’s ‘get out’ clause … “Importantly, we were unable to evaluate ‘catalytic’ aid.” 8 Three catalytic influence questions …

Domestic CAPEX flows growing in MICs and LICs 9 * Rural only

Catalytic influence question 1 How to influence growing domestic WASH sector CAPEX? 10

Ethiopia

Most WASH funding not in the hands of WASH sector Swap discussion covers only 35% of sector expenditure 65% of WASH from multi-sector expenditure

Catalytic influence question 2 How to squeeze more and better WASH out of the growing streams of non-sector domestic finance? 13

Planning  Example Kambia:  We are working with districts to ensure they use the data Cost recovery Port Harcourt, Nigeria  City of 2 million people  Water utility serves 1% of HH  Private solutions for other 99%  No regulation of boreholes  No sewerage just one (small) treatment plant

Planning  Example Kambia:  We are working with districts to ensure they use the data Cost recovery Port Harcourt, Nigeria  City of 2 million people  Water utility serves 1% of HH  Private solutions for other 99%  No regulation of boreholes  No sewerage just one (small) treatment plant Hand drilling - jetting Dotun Adekile Approximately 30,000 hand-drilled wells have been constructed throughout Nigeria

Nigerian HHs have shifted away from utility supply 16 Millions of people Urban $670m of aid pointed at this … There are 200 enterprises, carrying out manual drilling in Lagos alone (Danert et al, 2014) … while Nigerian households have invested in this

Catalytic influence question 3 How to capitalize, improve and regulate household investment in alternative service delivery models? 17

Aid modalities – catalytic or not? 18 Projects – a means of keeping aid $ isolated from domestic $ to deliver specific outputs Pooled funding – a means of reducing reporting burden while isolating aid $ for specific outputs Sector/General Budget Support – mixing aid $ with domestic $ to jointly deliver country outputs Technical Assistance – influencing the 3Es of either or both aid $ and domestic $

Project modality dominant across countries 19

“… it is not an easy task to bring donors to a consolidated pool funding and a joint program arrangement, as some development partners still prefer to operate in projects using their own rules and procedures … for budgeting, planning, implementation and reporting. This situation is highly inefficient, and most importantly, weakens much of the limited capacity available.” Hon, Sufian Ahmed, Ethiopian Minister of Finance

Credit: Jemimia Sy

Three ways aid needs to be more catalytic 1.To influence growing domestic WASH sector CAPEX 2.To squeeze more and better WASH out of the growing streams of non-sector domestic finance such as safety nets and block grants 3.To capitalize, improve and regulate household investment in alternative service delivery models 22

In difficult environments like Somalia If embedded in government institutions Re-establish the state Investigate alternative designs Understand winners and losers in development Projects can be catalytic …

PROVIDERS Management THE STATE Client Power CITIZENS/CLIENTS VOICE COMPACT SERVICES Coalitions | Inclusion DONORS REPORTING TECHNICAL ASSISTANCE SECTOR BUDGET SUPPORT 1. Influencing growing domestic WASH sector CAPEX “Skin, heart and soul in the game”

How to get procurement to work in 1000 different districts?

26 Building better aid-domestic interfaces through adopting SWA “Collaborative Behaviors”

2. Integrating WASH into poverty reduction programs India (5) Philippines (3) Vietnam (2) Indonesia (1) Laos (1) Cambodia (1) Social Protection Programs Social Protection Programs Around 70 countries have Conditional Cash Transfer programs targeting the poorest and vulnerable. Community Driven Development Programs WB supports 400 CDD projects in 94 countries valued at US$ 30 billion Health and Nutrition Services Integrating WASH into health extension programs with focus on maternal and child healthcare. Sitaramachandra Machiraju

3. Tapping the market Support to private sector suppliers to overcoming obstacles to investment in a regulated environment … 28 … plus microfinance to households to empower them to choose

Matching aid modalities to context: Horses for courses Project finance + TA: to pull public sector capacity into place and to stabilize specific critical institutions Sector Budget Support + TA: to push service delivery in countries where public expenditure is on a par with aid flows General Budget Support + TA: to squeeze more WASH out of safety nets and other non-sector funding Microfinance + TA: To nudge private sector service delivery towards more sustainable solutions and give HH more control of the service delivery models they want 29

That just leaves Tuvalu … 30

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