Incentives for Rational Planning - Asking the Right Questions

Catarina Fonseca, WASHCost Project Director, blogs from the symposium around the finance theme:

“There are no incentives for rational planning” noted one delegate during the afternoon discussion. We were discussing the costs and financing of sustainable water, sanitation and hygiene services with around 25 of the 200 participants who decided to join one of the four parallel sessions. Is planning ever rational? Is real planning taking place at all? I first started to hear the “30%-40% lack of functionality” figure for rural water supply being quoted about seven years ago – I could never find the source of that data.

Being involved more recently in collecting financial data from donors, foundations and INGOs for the WHO UN GLAAS report, it is no surprise that one of the conclusions reached is that donors cannot easily track how aid money for the water sector is being spent. Disbursement figures from donors at international level; completion reports from governmental agencies and INGOs at national level; and any document with disaggregated real cost expenditures are extremely difficult to access.
This is illustrative of planning for rural water supply services. In the end, most decisions are political and when they are not, professional judgement rather than evidence-based data seems to guide most budgeting and financing estimates in the sector.

According to one government official, “there is no driver to make more cost effective decisions because they are someone else’s decisions anyway”. In other words, banks make their own decisions; donors make their own decisions; and national level or district level governments make their own decisions. In effect, this makes them the ‘end providers’ of finance, deciding where to allocate funds (transfers, tariffs or tax). In practice however, they are not accountable to anyone.
There is little accountability on the outcomes of financing flows to the sector. The questions and comments seem to stop at: ‘How many people do you think this handpump reaches?’; ‘No one is demanding service-oriented accountability, so does this mean that the poorest in this area have been receiving a minimum standard of service for the last 10 years therefore leaving no incentive to collect, analyse or share costing information?’

In the end it is not that we as sector players are irrational. It is just that no one seems to be asking with any persistence for the real financial expenditures because so far, no one needs them. However, as water coverage increases for new services but stagnates or declines for existing services, it becomes increasingly difficult however to ignore the constant injection of capital investment in infrastructure with limited functionality after a couple of years; turn a blind eye to everything else; and keep making the same type of investments and investment decisions that have been exercised over the past 10 years knowing that this will not affect scale or lead to change.