22 June 2011

Some for free, pay for more

I met Mike Miller of South Africa last week. He was kind enough to send this interesting paper [PDF] on free basic water in South Africa. His discussion of the political and economic tradeoffs is particularly useful.

Abstract: The South African government’s policy decision in 2001 to provide a basic amount of water free of charge to all citizens has been controversial. Traditional policy advice was that all water should be paid for, even if some costs were subsidized. A review of the implementation of the new policy suggests that the flexible approach adopted ensured wide applicability, although it has been criticized for defects of both exclusion and inclusion. However, it has helped not only to achieve social equity but also has supported the broader objectives of conservation and environmental sustainability. The political legitimacy conferred by the approach has enabled water supply organizations to recover their costs and achieve the economic objective of financial sustainability. South Africa’s experience with free basic water thus demonstrates that addressing social and environmental dimensions together with economic dimensions can lead to more effective and sustainable policy.

2 comments:

stickman said...

Interesting.

I'm from South Africa myself and, while our free basic water policy has been widely praised (justifiably, for the most part)... The overall water situation in the country is pretty SNAFU.

In short, we've only got the first half of your "Some for free, pay for more" slogan down pat.

People in SA certainly haven't been charged anywhere near effective prices up until this point (i.e. for inducing proper infrastructure investment and spurring conservation). There are eerie parallels with the country's power supply, which is also straining under the weight of a paralysing monopoly and decades-long underinvestment.[*] On that note, however, there appears to be some potential good news w.r.t. sensible pricing policies in the pipeline: http://bit.ly/guQbRc

[*] And then there's the acid mine drainage problem that poses a serious threat to ground water supplies for some of the country's biggest cities, etc...

Anonymous said...

Just came to me: "Some for free, more for a fee"