The Effect of Decentralisation on Access to Sanitation and Water Services: An Empirical Test Using International Data

Abstract

Decentralisation promises efficiency gain and improved access to public goods and services, especially at the local level. Under decentralised governance arrangement, regional and environmental peculiarities are given prominent consideration in delivering public goods and services. Given the impact of the environment in influencing sanitation and water services, particularly water provision, this study examines the effect of decentralisation, as measured by revenue share and expenditure share, on improved access to sanitation and water services. Exploiting the variation in improved access to sanitation facilities and water sources using a static panel data estimator, this study’s empirical results suggest a positive impact of decentralisation on the improved access to sanitation and water services. The positive effect is larger in rural areas vis-a-vis the country level and urban areas. The study reveals that wealth and institutional factors are also important to improve access to sanitation and water services.