Inefficiencies in water project design and operation in the third world: An economic perspective

Abstract

Water projects in less developed countries (LDCs) frequently are poorly operated and maintained. As a result, project benefits and development impacts fall short of plans. The problems begin in the project identification, design, and construction stages: donor and host country biases lead to inappropriate projects, unsustainable technologies, and shoddy construction. Later operation and maintenance are then difficult or impossible. Causal factors include donor desire to build monuments and sell technology, provision of excessive capital to favored sectors or institutions, and an unwillingness to require a reasonable quid pro quo from the host country. Host country factors include excessive administrative centralization, lack of rewards for good operation and maintenance, and widespread corruption in forms that seriously distort allocative efficiency. Until individual actors on both sides can be motivated to pursue the long‐run good of the LDC, Third World water projects will continue to have low or negative net payoffs.