Water for the Poor

PA says:

Everyone knows that over 1.6 billion people in the world lack access to clean drinking water. Why is this? What is the real "water problem"? Is it a technical issue, i.e. is it a lack of technology development that causes this?? Or is it a policy issue?? Is the water problem more complicated than we make it out to be??

There are, of course, technical problems with water supply: Water in rural areas tends to be polluted by effluent from livestock and sewage; water in urban areas either does not exist (no pipes) or it's of below-drinking quality.

These "technical" reasons are often the result of poor institutions and incentives -- not a lack of water or the poor's inability to pay. (The poor often pay "too much" for what they get now.)

My solution for providing water in the developing world would have three dimensions:

• Stronger property rights for water sources
• More competition among water suppliers
• Stronger protection for consumers

With these three elements, the poor could get access to better water from providers that would be able to charge for the water as well as punish providers who provided sub-par water -- either by shifting to another provider or civil penalties for breach of contract. [See this post for more on markets.]

Without these necessary solutions, dams, cloud-seeding and filtration plants will be useless for increasing supply and harmful in terms of diverted attention.

Bottom Line: Most of the developing world has adequate water, but it lacks the institutions for provisioning that water. Fix the institutions and drink freely!