A Framework for Analyzing Tariffs and Subsidies in Water Provision to Urban Households in Developing Countries

This paper aims to present a basic conceptual framework for understanding the main practical issues and challenges relating to tariff s and subsidies in the water sector in developing countries. The paper introduces the basic economic notions relevant to the water sector; presents an analytical framework for assessing the need for and evaluating subsidies; and discusses the recent evidence on the features and performance of water tariffs and subsidies in various regions, with a special focus on Africa. The discussion is limited to the provision of drinking water to urban households in developing countries.