Indian Defence Forum
The Preference Bias in Sanitation: Explaining Failures in Public Provision
Abstract: This paper explores the persistence of a “low-equilibrium trap” in the
provision of public sanitation in the Indian subcontinent – characterized by a very low
willingness to pay at the local level that is conjoined with a highly subsidized supply
supported by soft-budget constraints at the state (federal) level. The resulting low level
of cost-recovery is combined with endemic misuse of funds often with a complete
breakdown of public services and frequent resort to private supply options.
When considered jointly, these outcomes are symptomatic of a “tragedy of the commons”.
Such failures in public provision at the local level may be traced, it is argued, to the
persistence of a culturally evolved preference bias towards private, as opposed to public,
consumption of hygiene. The ethically neutral outlook upheld by individuals towards
public squalor alongside an emphasis on private cleanliness under the climatic
conditions of the subcontinent is suggestive of a more general lack of an “existencevalue”
for the common good within the individual utility function that, in turn, implies
unwillingness on the part of individuals to sustain a positive demand for public goods over
time.
The administrative history of public sanitation in British India is used to illustrate the
widespread occurrence of such a bias within the population. The resistance to sanitary
reform and failures in public provision under both British India and post-independence
suggests that a normal preference for the public good – local or state (federal) -- cannot
be presumed for the Indian subcontinent. Without a change in the underlying preference
structure, neither federal provision nor Tiebout-inspired reforms at decentralized
provision ensure the desired outcome in terms of higher overall level of public sanitation.
Finally, the decentralized provision of public goods post-independence is compared with
the relatively centralized or “Imperial” administration of British India. Paradoxically, the
latter appears to be the least conceited response to actual preference biases confronted
by the state.
By Nimai M. Mehta
Professor of Economics
Abstract: This paper explores the persistence of a “low-equilibrium trap” in the
provision of public sanitation in the Indian subcontinent – characterized by a very low
willingness to pay at the local level that is conjoined with a highly subsidized supply
supported by soft-budget constraints at the state (federal) level. The resulting low level
of cost-recovery is combined with endemic misuse of funds often with a complete
breakdown of public services and frequent resort to private supply options.
When considered jointly, these outcomes are symptomatic of a “tragedy of the commons”.
Such failures in public provision at the local level may be traced, it is argued, to the
persistence of a culturally evolved preference bias towards private, as opposed to public,
consumption of hygiene. The ethically neutral outlook upheld by individuals towards
public squalor alongside an emphasis on private cleanliness under the climatic
conditions of the subcontinent is suggestive of a more general lack of an “existencevalue”
for the common good within the individual utility function that, in turn, implies
unwillingness on the part of individuals to sustain a positive demand for public goods over
time.
The administrative history of public sanitation in British India is used to illustrate the
widespread occurrence of such a bias within the population. The resistance to sanitary
reform and failures in public provision under both British India and post-independence
suggests that a normal preference for the public good – local or state (federal) -- cannot
be presumed for the Indian subcontinent. Without a change in the underlying preference
structure, neither federal provision nor Tiebout-inspired reforms at decentralized
provision ensure the desired outcome in terms of higher overall level of public sanitation.
Finally, the decentralized provision of public goods post-independence is compared with
the relatively centralized or “Imperial” administration of British India. Paradoxically, the
latter appears to be the least conceited response to actual preference biases confronted
by the state.
By Nimai M. Mehta
Professor of Economics