Designing Direct Subsidies for the Poor - A Water and Sanitation Case Study

services has long been recognized as essential to public health and individual welfare. In most countries government policy has traditionally been to keep water companies in public ownership, and to keep tariffs artificially low through a range of more or less explicit subsidy measures. The results have often been unsatisfactory. Service quality and coverage remain inadequate in many countries, and subsidies directed at public water companies have often benefited the middle classes rather than the poor, who remain unconnected to the public network. This has led to a search for alternative subsidies that would guarantee access to basic services for the poorest.