Can Communal Systems Work? The Effects of Communal Water Provision on Child Health in Peru

Abstract

Communal organizations such as user associations and cooperatives are quite prevalent in some developing countries where public and private systems fail to provide basic services like water and sanitation. Yet, there is debate in the literature on whether communal provision can actually work. This paper focuses on the so-called Juntas Administrativas de Servicios de Saneamiento (JASS) that provide water and sanitation services to about 11 million people in Peru. Using detailed household survey data, we examine the differential impact of the JASS vis-a-vis public systems on child health. Our identication strategy exploits the legislative changes introduced in the 2000s and the arbitrary cut-off used to classify the administrative sub-units of Peruvian municipalities (districts) to get exogenous variation on the type of water provision. We find that the JASS do not outperform public provision in the districts of the Coast and in much of the Rainforest region. However, they have a negative and signicant impact on diarrhea and low birth weight in the districts where the first Inca settlements were located. We argue that the long-standing Inca tradition of communal work present in those areas helps solve the collective action problems associated to communal projects and would therefore explain why the JASS work well there.