3rd July 2017

Making Markets Work for the Poor — Science, Art or Speculation?

By David Elliott

Editor’s Note: This article originally appeared on CGAP’s website and can be viewed HERE

As an adviser, trainer and all-round advocate of the “making markets work for the poor” approach to more effective development, I get asked a lot of questions about the approach. A typical first exchange runs like this: “Market facilitation. I get it. But what exactly should I do?” My answer: “It depends, but you need to start by asking the right questions.”

This is no doubt is a frustratingly opaque and evasive answer to a direct and seemingly simple question. Call me a radical, but to mind, any effective approach to good development should start by asking the right questions, not proffering the right answers. Market facilitation is a process; it is not instrument driven. We want to understand why things are the way they are and then help to change them in ways that contribute to our development goals. As a process, market facilitation blends science, art and speculation as follows:

Science. We are analytical, diagnostic and precise about why we are trying to influence market development, and we start by asking the right questions.
Art. We are up close, personal and judgement driven when we take action to influence market development.
Speculation. We innovate, we take risks, and we actively manage portfolios of interventions, using data to mitigate risk and manage up successes.

These points are well illustrated in the work I have been doing recently with FSD Africa, seeking to unpack various market facilitation experiences of FSD Kenya. When you read the case studies of their work with M-Shwari, informal savings groups, and savings and credit cooperatives, you will likely be struck by the sheer diversity of just what they did as a market facilitator. Their work on informal savings groups with CARE and CRS alone illustrates the breadth of their work.

FSD Kenya Support to CARE and CRS:

Improving supply-side cost effectiveness
Innovation Facilitating a series of innovation workshops and technical assistance aimed at innovating the savings group model, focused on costs and delivery channels.

Supporting product development
Capacity building Supporting the partner, through technical assistance and money, to develop a new savings group model in line with the recommendations from the innovation support process.

Innovation and learning
Evaluation Supporting CRS as a new partner to test an alternative approach and foster innovation and learning. Commissioned a quality of delivery study to evaluate effectiveness and impact of key model features.

Linkages to formal finance
Linkages Having reached a critical mass of functioning and sustainable savings groups, PostBank was approached to test ways in which it could connect with and support savings groups with savings and loan products.

But as you read the case studies, do not just look at what FSD did. What they did does not explain their success. Look at the process they used. As expanded on in the case studies, FSD Kenya’s success lies in the market facilitation approach that they followed.

Science. Informed by a first principles approach in all cases, FSD asked the right questions and understood why they were doing the things they were doing. Their vision, purpose and objectives were all clear to them and, just as importantly, to their partners.
Art. Their reputation, profile, and professionalism allowed them to get partners to the negotiating table, and their flexible approach allowed them to do good deals underpinned by clarity of process and purpose.
Speculation. Seeing themselves as partners in the process, they were up close and personal and fully invested. Decisions on where and how best to intervene were regularized in the process, informed by data, and guided by clarity on objectives, vision and purpose.

“’T’ain’t What You Do (It’s the Way That You Do It),” the great song by Ella Fitzgerald, offers us a truism that we would do well to reflect on in our work in the development sector. Good market facilitation is not just about what you do. It demands that we blend science, art and speculation to do it well. Get these right, and the “what” we do will fall out in the wash.

Yet I suspect, the most common question I will be asked at the next training I do will be: “Yes, lovely, but what exactly should I do, David?” Here’s hoping not!

Download pdf

27th June 2017

Market Facilitation Is the Way Ahead, But It Needs to Do More

By Alan Gibson

Editor’s Note: This article originally appeared on CGAP’s website and can be viewed HERE

Kenya is a good place to start when considering market facilitation. It is the poster child of financial inclusion, with access to formal finance growing dramatically from 27 percent in 2006 to 75 percent in 2016. But, more than this, the last 10 years have also witnessed the influence of FSD Kenya (FSDK), an organization which, from the outset, has sought to follow a facilitation approach. Now, with the publication of an independent case study on FSDK, we have a chance to draw out lessons from this experience. What does this tell us about market facilitation? I’d suggest three takeaway points.

Market facilitation can (and does) work

By any reasonable reference point, FSDK has been a highly successful program. For example, it has contributed substantially to changed business models and the momentum of corporate growth and inclusion — notably the phenomena of Equity Bank and the M-Shwari product. It has been a key influence on the development of a policy and regulatory environment conducive to the era of digital finance. Its research has percolated throughout the sector and raised an understanding of financial inclusion. Its work on key “public” functions, such as payments systems, is now beginning to bear fruit. Notwithstanding the presence of other favourable factors, without FSDK, change would have been reduced or would have been much slower or simply would not have happened.

So the essence of market facilitation — that addressing underlying systemic issues that constrain the development of functional, inclusive financial markets will achieve greater, more lasting change than conventional interventions — has, to a large extent, been fulfilled in Kenya. The case study is replete with evidence; the premise behind systems approaches is validated. And that’s positive.

But, of course, there are caveats. In a number of spheres, such as service markets and cooperatives, FSDK has had limited impact. In some areas of intervention “success,” FSDK finds itself still playing an active role — for example as an adviser on regulation, as the main driver behind research, and as a technical adviser and “de-risker” in innovation. All of this raises questions about the sustainability of change.

More fundamentally, there is a jarring disconnect between, on the one hand, advances in headline financial inclusion and the conspicuous growth of the financial sector in Kenya and, on the other, the stark fact of persistently high poverty levels. And that’s less positive.

Market facilitation is a process we can understand (and therefore improve)

What explains the above picture? The main reason for success is that FSDK got the big things right as a facilitator. Its work has been analysis and knowledge-led; it has employed good-quality people who are close and credible to the market; it is seen to be independent, as a “third party” able to engage with multiple players; it is flexible, able to adapt what it offers to fit different situations; and it is able to engage on tasks that require a longer time perspective. Its status as an independent trust rather than a conventional project arrangement (a position supported by its funders) has also helped.
Where FSDK has been less successful has often been because of failings in operationalizing the approach. For example, not using systems analysis correctly to identify key constraints means actions can have the wrong focus. Similarly, not giving sufficient weight to motivations in understanding market behaviour can lead to (ill-fated) technical solutions to more deep-rooted political and institutional problems. And not having a sufficiently clear picture of how a future system should function can allow drift into the continuation of direct delivery roles. The lesson from these experiences is that there are operational disciplines and frameworks that should be used in putting market facilitation into practice. And these can be learned.

Successful facilitation is likely to take us into difficult issues on the role of finance

Most of FSDK’s work has been technical in scope, concerned with capacities, information, coordination, etc. Yet it is clear that key systemic constraints to inclusive finance in Kenya are also political in nature — concerned, in particular, with incentives.

Most important here is the central “So what?” question for all organizations engaged in financial inclusion. Kenya’s finance market may well now be working slightly better for poor households and allowing them to manage their lives better. But it is clear that it is working even better for others — for middle-income consumers and, in particular, for the supply-side of the finance market which, with higher revenues and profits, has prospered throughout Kenya’s “inclusion years.” As pointed out in Mayada El-Zoghbi’s blog, finance which is more transformational for poor people (i.e., inclusive) would need to connect better with the real economy (like agriculture) and real services (like health). But why should banks change and innovate into riskier areas when there are easier ways of making money?

In this context, any valid change process has to be rooted in the incentives shaping market players’ behaviour. This includes not just the regulatory environment for banks but the broader, implicit social contract shaping the role finance plays in economies and societies. Working in this space may be new and uncomfortable for development agencies, but the experience in Kenya suggests that it is a necessary direction of travel if finance is to become genuinely inclusive. And while this is challenging, fortunately the frameworks and guidance used in market facilitation have equal relevance in considering how to engage in this new frontier.

Download pdf

7th April 2017

Smartwashing Development

By Kate Fogelberg

First it was sustainability. Then it was scale. Now it’s smart. My frustration with over-loved and under-defined S-words in development reached a new low today. Just this week I have read a smart lesson on private water operators, a UK government report calling for smart international development, a BBC article about smart slums, and had a look at a website for smart meters. Smart is everywhere!

But is that a good thing? One of the better slides at an otherwise unremarkable water conference several years ago started with a slide simply titled Sustainability. But it was followed by a refreshingly frank insight: Sustainability: it’s just like teenagers and sex, many are talking about it, but few are actually doing it. Is smart development in smart cities with smart infrastructure destined for the same? Lots of smart talk, but little smart action? A bit of “smartwashing” without any concrete differences?

This is not to say that there should be a singular definition of smart. In fact, as an American living in the UK, I enjoy the nuances between when a Brit says “don’t you look smaaaaht today, Kate,” and when my American father-in-law compliments my intelligence, not my clothes, when he says I look smarter than my husband. What this simply shows is that context matters – a smartphone is not the same thing as smart development. A smart toilet – which will raise the toilet seat when it senses you nearing, angle the bidet to your preferred anal cleansing height, and oh so much more – is not the same as smart slums. It’s back to basics, but a first step towards actually smartening up development would be to define what smart development is and how to go about it.

Perhaps the reason smart development is sitting so poorly with me on this late Friday afternoon is the overemphasis on what it is or isn’t, rather than how to do it. By “smartwashing” development, one assumes that we just need a bit more technological innovation. That we are on the cusp of the next technology that will finally be the answer to the difficult social, economic, and political problems that perpetuate poverty. Technological innovations have had and will continue to have an impact on inclusive growth, but they are rarely the magic bullet to lift millions out of poverty, no matter how smart they are.

Calling for smarter development without doing anything differently is meaningless. How to do it is arguably more important than what it is. Just because Trump says he has the best words, doesn’t make it so. The same goes for smartening development up. Just because you say it’s smart, doesn’t mean that it is. Doing development differently requires more than adding another word that begins with s. There is a worrying absence of a discussion of the role of smart people in all of this buzz. Doing smart development surely has to include learning from what has been done before and not repeating mistakes. But as simple as that sounds, it’s incredibly hard for smart people to do that. I’ve visited underperforming water systems on six continents and it’s a near-universal truth that infrastructure-led approaches to water poverty, no matter how smart the technology is, are not going to solve the problem. Yet well-meaning and most likely smart people keep doing this without changing course. Doesn’t sound very smart now, does it?

Right, lest I leave you with the impression that I am a technological Luddite advocating for dumber development, I’m off to try out my new smart watch that will keep me from getting lost in the clag in the Lake District while continuing to ponder how to actually do development smarter, not just talk about it.

Download pdf

7th February 2017

Binary choices, Obaman bubbles, Trumpian times … oh, and the future of UK aid

By Alan Gibson

‘Divided’ times? ‘Fractured’ might be a better term. Trumpian – or one of its many variants – even better.

Whatever terms we use for the opposing sides in this contested era – in vs out, mono vs multi, love vs hate, Obaman smooth vs Trumpic rough …. the main features of the emerging political landscape have been set. International aid in the UK is part of this Brexit-Trumpist world and is not immune to the forces that have shaped it. What does UK aid look like in this context and how should we respond to 2016’s political eruptions?

Let’s look at the context. The underlying drivers behind recent changes have been poured over endlessly. Amidst the benefits of globalisation, a substantial Left-Behind class has developed who have borne disproportionately the costs. Stagnant real wages and the decline of ‘old’ industries and regions have been accompanied by rising inequality. Much of this group’s resentment is directed against those seen to be prospering, the New-Included: more urban, educated and wealthier. The former is characterised as white, incoherent and annoyed – grimly battling it out against migrants in low-end labour markets; the latter as cosmopolitan, articulate and optimistic – contented consumers of the low-cost services fuelled by diligent migrant labour. Generalised descriptions, not without caricature, but largely accurate.

These differences have found manifestation in political choice, buttressed by sources of information. For the Left-Behind, the political class represent liberal values and pursuit of a distant politically correct agenda in a politically correct vocabulary, none of which is theirs. Their media of choice – commercial and social – feeds their preconceptions and instincts. For the New-Included, embarrassed by ‘the other’s’ ugly reactionary ways, different political choices are made fed by different information sources. Political polarisation results, with little shared ground of fact to allow ‘objective’ exchange between groups. In his farewell address, Barack Obama characterised this polarisation as society retreating into different ‘bubbles’, where individuals are “surrounded by people who look like us and share the same political outlook and never challenge our assumptions”, where we “accept only information, whether true or not, that fits our opinions”. This is the new ‘post-truth’ world; what matters is what feels right – this is the ‘truth’ that counts.

In this context, referenda and elections force a binary choice between two polar opposites. Not a place for nuanced debate but rather one which requires that misgivings are set aside and sides are chosen. And so, in the UK, we (liberal-minded development people) suppressed those awkward EU questions (‘Just remind me again where accountability is here?’) and doubtless in the US the same happened with inconvenient Clinton issues (‘Tell me again how chummy $225,000 speeches to Wall St quite mark her out as a woman of the people?’), and feeling aghast at the Trumpish alternative, we make our ‘progressive’ choice.

And so where does UK aid fit into this? Look closely and we see that, in its own way, it is marked by familiar features of polarisation and self-serving, self-referential bubbles of debate. Although in a different way from the current Trumpeusian shenanigans, the goings-on in UK aid are equally extraordinary. Fed by the (then) Government’s desire to rebrand itself (as ‘kinder’ and ‘caring’) UK expenditure on overseas development assistance (ODA) has grown from 0.5% Of GNI in 2009 to 0.7% (£12.4bn), a 50% growth in real terms. This spending growth is exceptional first because it has happened at a time of austerity with most domestic budgets static in real terms at best. And second, and without precedent, because since 2015 ODA spending at 0.7% of GNI has been enshrined in law, further real ODA growth is guaranteed. Cementing spending at this level, as advocated by the UN, has been a step change in scale and in status for UK ODA. Moreover by establishing a tangible issue – the 0.7% spend – around which binary views (for or against) can be formed, it has also placed UK international aid in the same Trumpovian world where allegiance prevails over reason.

It is worth reminding ourselves of the origins 0.7% spending target. This does not lie not in any rigorous analysis or model which demonstrates that this, somehow, is the ‘right’ amount to trigger development. On the contrary, the original financing gap model that lay behind the target and articulated in the 1950s has long since been discredited (notably by Clemens and Moss,). Nor is there a compelling argument based on efficacy; on the contrary, the Independent Commission for Aid Impact’s (ICAI) regular assessments of DFID’s work show, at best, a mixed picture of success. Rather, it emerged in the UN (almost 50 years ago) as a result of opaque processes between different countries’ officials, lobbyists and politicians. And somehow, through the passing of time and the absence of challenge, it has acquired a stature of permanence and authority. Indeed, ironically, there are parallels with the murky process that European colonialists went through 130 years ago when they carved out African ‘countries’ on a map, a process without transparency or developmental merit but whose outcome commanded widespread acceptance.

And so the principal argument for the 0.7% spend is it that it is, somehow, the right thing to do because, well, intrinsically, it feels right. Never mind that it is essentially a made-up target imbued with spurious intellectual weight, if we all say it often enough it will be right. “We should feel proud”, Britain is “leading the way” as an “aid superpower”. In other words, 0.7% aid spending is the right thing to do because we so want it to be so. In classic post-truth, Trumpegian style, this is justification by feel, and not much more. (Oh, and the UN says so, so it must be right).

The net effect of this conspicuous spending growth and the palpable thinness of the rationale for it has been to give the impression of UK aid as the pet vanity project par excellence of the political class. A cause celebre of leftie and luvvies where agreement with the 0.7% spend is de rigueur. And to invite scrutiny. With so much money swilling around the aid system – which, above all, has to be spent – it has not been difficult to find many examples of projects of questionable worth. More tangibly, the high financial rewards claimed by some have attracted outraged headlines and editorials – “Scandal of our wasted foreign aid”, “Meet the begging bowl barons”. Among Trumparistas, the foundations of the 0.7% spend are seen as brittle self-righteousness and greed rather than selfless generosity.

Quite quickly public views on UK aid, beyond the technical exchanges between researchers and practitioners, have descended into Obama-like bubbles. On the one hand, are the critics of aid who focus on spending profligacy, high fees and profits, the hypocrisy that lies beneath these, and apparently undeserving causes that receive aid. This is juxtaposed with the frugality of public spending on social and health services. The attacks are led by the instinctively hostile Daily Mail but others at the broadsheet end of the media – The Times and The Daily Telegraph – have entered the fray. Undoubtedly, a momentum is being built in Trumpland.

The other bubble, pumped up hugely by aid’s new scale and prominence, are the defenders of aid and the 0.7% spending boom (the two being seen as indivisible). This focuses on aid’s apparent impact (lives saved, roads built, children educated etc), with large numbers cited as evidence, and how (as above) the UK should be proud of the role it is playing. This is led by The Guardian, mouthpiece for internationalist sentiment, with supportive quotations from NGOs. There is generally little attempt to respond to the charges made by the aid critics, revulsion for all things Trumpistian is not hidden. and the validity of the 0.7% spend is seen to be self-evident, a moral certainty not requiring explanation.

In true binary style, disconnected, parallel bubbles have developed. Each to his or her bubble. Of course, those of us engaged in international aid are assumed to be loyal adherents of the 0.7% spend and all that goes with it. Yet our refusal to acknowledge publicly what is known privately on the effects of the 0.7% target means we vacate the space for nuanced, reasoned analysis. For example:

 That for DFID, too much money is their biggest problem. Privately, informally, senior DFID staff recognise the (unnecessary) burden of the spending pressure.

 That while aid requires good people and organisations paid appropriately, high budgets have created a fairly lucrative ‘poverty industry’, distorting incentives far beyond the usual suspects of private consultants.

 That in a context where remittances and investment dwarf ODA, the efficacy of aid is as much about quality, insight and process as quantity.

 That, unlike domestic public expenditure (education, health etc), where government is a ‘deliverer’, aid for other (sovereign) countries is about ‘enabling’ others, and this is not simply a function of financial resources …..

 …. but delivery in domestic ‘public goods’ is resource dependent. For example, notwithstanding debates on the modes operandi of UK health care, outcomes are unlikely to improve as long as health spending (8.5% of GDP) lags the European average (10.2%) so substantially.

 That while the world seems beset by crises, in relation to standard indicators of progress, global conditions have never been better. Many countries – most of Latin America and SE Asia – have grown beyond the gamut of traditional aid. Others will follow.

What then for UK aid? With the political environment which gave birth to the 0.7% of GNI spending law now gone, it seems inconceivable that it will survive into a new Parliament, or even get to the end of this one. Nor should it. You don’t have to be a rabid Trumper to see that the arguments for the 0.7% spending level lack validity. The failure of UK aid organisations to recognise this but instead keep within their ‘more is better’ bubble is a mistake in three respects.

First, the cause of international development is diminished, being seen as laced with the self-interest and hypocrisy of (elements of) the aid industry. For aid organisations to emerge cleanly from this entanglement will not be straight forward.

Second, an outmoded view of aid is prolonged that hinders us getting to more valid issues. International development can work and does have an important, if different, role to play in shaping a better future, and a better world. Removed of the 0.7% burden might allow a more honest and effective discourse on what this role is and how it should be played.

Third, and last, an unwinnable argument is supported. To be a loser, to be Trumped, is not a position from which to influence the way ahead for UK aid.

Download pdf

6th February 2017

Mo’ Money, Mo’ Problems

By Kate Fogelberg

Amongst all of the other news stories about the American election, I wouldn’t be too surprised if you missed the Daily Mail’s piece on UK aid contractors pocketing mountains of cash and under-delivering drinking water and irrigation infrastructure in Sub-Saharan Africa. My brother is an attorney and he can never enjoy legal thrillers because he’s too focused on the legal minutiae that makes for boring reporting, but it is part and parcel of a legal career. I feel the same when I read the latest juicy water expose. The headlines capture my attention, but I never get to really enjoy the story. The public, however, should be outraged, but at more than just the “fat cats” mentioned in the Daily Mail.

Perverse incentives
While the article is designed to elicit a moral shudder to the image of greedy contractors profiting at the expense of both the British taxpayer and the poor, climate unresilient African farmer, all it does for me is remind me of the larger problem. At its simplest level, UK aid is considered successful if the 0.7% target is met. Thus, there is pressure to spend money, not necessarily contribute to meaningful development. So even though the results on the ground sound rather grim to the Daily Mail reader, the contractors are, in fact, spending the money and contributing to that magical 0.7%. Cancelling the project, as the Daily Mail suggests should have happened, is politically embarrassing for all those who approved it and just puts that target even further away.

A drop in the bucket of waste
Although the piece focuses on the limited results of climate resilience, there is also a substantial component of drinking water infrastructure included. No longer the elephant in the washroom, it is well-known than at least 30% of water infrastructure fails within a few years of investment. In some countries, this is closer to 60%. So what makes me even more distressed than the latest “fat cats” to get caught with their hands in the cookie jar, is that of the £0.7 billion spent by DFID on WASH programmes from 2010-2014, one could project that 1/3 of that, close to £230 million, is likely to be the value of broken infrastructure. But since there is no systematic reporting of investment sustainability, it could be twice as much.

People versus pipes
I wish the answer to the water and climate change crises was just more and smarter infrastructure. But it’s not that simple. As someone who just spent ten years looking at a lot of broken pumps and taps, I know all too well that we can’t engineer our way out of the crises. More donated wells and irrigation schemes without investment into the root causes of why they’re not there in the first place or why services fail prematurely will just lead to more and not-so-smart failure.
The programme was not designed to deliver many infrastructure investments itself, but rather get projects “investment ready.” I have less of a bone to pick with this, in theory, but they’ve neglected the opportunity to address one of the ongoing systemic constraints to expanding and maintaining drinking water and irrigation services: human capacity.

Right idea, wrong solution
The article reports that the programme hired 550 staff. This highlights one of the newer elephants in the room: the human resource gap in the WASH sector. Examples abound from the need to multiply the workforce nine times to reach and sustain universal access in Papua New Guinea; to the lack of 82,000 professionals in the Philippines; to the need to double the workforce in Mozambique. Once this project ends, all of the skilled work that was being done by the 550 people to plan, survey, finance, build, operate, maintain, and more, will leave another gap. There was a missed opportunity to tackle this challenge, but the further a programme is from the photogenic farmer and pump, the less sexy it is to sell to the public or the politicians.

Timing matters….or does it?
One of the main complaints of the article is that only 370 people of an expected 15,000 are now more “resilient,” which is left to the reader to guess what that might mean. The contractors defend only reaching 2% of their targets to timing issues and that many more farmers will soon be resilient. Additional projects are underway, and I’d throw them a bone on this one. Perhaps it’s my own biases showing as I remember many a water and sanitation infrastructure investment financed by households or governments to operate on their timelines, not foreigner reporting deadlines. But I would bet the ranch that even if thousands more were “resilient,” of which they very well might be by now, the outrage over contractor fees would remain.

Mo’ money, mo’ problems
I’m not surprised that reports of private gain for a “feel good” sector like international aid raise the eyebrows of many. Being a cog in the wheel of the development machine, I’m less morally disturbed by the idea of paying people to work towards improving lives and livelihoods than your average Daily Mail reader. But it’s got to be well spent and within reason, which is clearly defined very differently by DFID, contractors, and Daily Mail subscribers. However, putting mo’ money into a system or project that is ultimately concerned with spending mo’ money and expecting more and smarter results, sounds a lot like alternative maths to me.

Download pdf

13th January 2017

Making Markets Work for the Poo-er: Systemic Sanitation Problems Require Systemic Sanitation Solutions

By Kate Fogelberg

I am fresh off the plane from Springfield’s semi-annual “Making Markets Work” (M4P) training programme. I first attended this programme four years ago when my previous employer was tasked with “making markets work for the poo-er” by exploring private sector provision of sanitation goods and services. At the time, I was one of two lone participants from the water and sanitation (WASH) crowd, but this time, nearly a dozen WASHers showed up.

What’s happened to drive six times as many people to an intensive two-week training course away from the frontlines of improving access, use, and emptying of the beloved John? In a nutshell, there is growing recognition that business as usual hasn’t worked to solve the sanitation crisis and it’s time for a change.
For those who only have personal relationships with toilets, as opposed to the professional faecalphiles, a brief snapshot of the global sanitation sector paints a rather sh*tty picture of progress to date:

1. Diarrhoea is still the second-largest killer of kids under five-in 2016
2. Sanitation received the dubious honour of “most off-track MDG
3. More people lack access to a toilet now than when the world started counting in 1990
4. Because we humans are complicated beings, a minimum of 1/3 of toilets remain unused
5. Slippage – which refers not to slipping off a dodgy toilet but to abandoning a toilet in favour of “open defecation” (the technical term for having a crap anywhere that isn’t a toilet) – ranges from 21% to 92%
6. Nearly all of the wastewater in developing countries is released back into the environment with no treatment.

It is well known and well documented that access to and use of toilets improves the health and wealth of people and populations, so why such a poor track record? Some of the reasons lie in the approaches taken to date:

If we build it, they will use it: supply-side interventions focused on donating toilet infrastructure dominated the early years of government or development partner programmes, but did not have the expected results
If they build it, they will use it: demand-side interventions directed at changing people’s behaviours to build and use their own toilet with minimal or no subsidy have also not had the intended results.
If they buy it, they will use it: an approach that grew out of social marketing to work on both supply- and demand-side constraints – a move in the right direction, but hasn’t closed the sanitation gap yet either.

A recent meta-analysis of sanitation programmes concluded that despite the investment in the sector, there are no examples of externally-led sustainable sanitation at scale. So something must change and the six-fold increase of participants at the training programme is evidence of the interest in trying to make markets work for the poo-ers. While language doesn’t always translate into new or different actions, the last two years have seen increased recognition of the systemic nature of the sanitation problem in sector literature and conference topics. Donors and implementers alike are wrestling with how not to just provide toilets or convince people to get on the pot, but how external investment can and should be directed at supporting functions of the toilet system-like finance, information, new products and services-or formal and informal rules-such as regulations requiring landlords to provide toilets in urban slums or “Toilet Nightmare” reality television shows to change social norms.

Paying greater heed to organisations’ and individuals’ incentives and capacities is one concrete way to begin to tackle sanitation systemically. An example of increasing first-time access comes from water.org, an American non-profit organisation, which decided to do something about the oft-cited complaint of lack of finance. Complaining about the lack of money available for sanitation has been a common refrain since 19th Century British MPs didn’t want to finance London’s sewers, but water.org have been one of the first to do more than just whinge and ask for increased donations. Instead, they recognised that existing microfinance institutions (MFIs) could be convinced of the opportunity to lend to low-income households. Thus water.org shifted their philanthropic funding from building toilets to building the capacity of MFIs to secure commercial finance. The results are impressive: over ten years they’ve leveraged USD150m in commercial finance from an USD13m investment in market studies, MFI staff training, product development, and monitoring systems, resulting in 3m new toilet users. Working with MFIs to provide sanitation financing has become quite common, but hats off to water.org, who recognised the opportunity and provided right-sized support to make it happen.

Any place described as the “hotbed of septage tourism” gets my attention. The Philippines holds this honour because of its recent efforts at addressing the red-headed step child of sanitation, faecal sludge management (FSM). The status quo approach to FSM in many cities around the world is to charge pit emptiers a fee to be able to dump the waste in a treatment plant. Unsurprisingly, this results in non-compliance more often than not, as it is cheaper and more convenient to dump directly into the environment. But a while back, environmental groups – not sanitation experts – actually sued ten Filipino government agencies for failing to protect Manila Bay – and they won. Thus, the political incentives to do something about the problem became much more urgent and resulted in new arrangements to FSM. For example, in Manila, the water and sanitation utility recognised that by paying –instead – of charging-pit emptiers to deposit waste in their plant, they could incentivise emptiers to comply, and thus, improve public and environmental health.

Changing political will is an uphill task is any sector, but much, much worse when the topic is poop. But the Philippines example demonstrates that allies in other sectors can be effective persuaders. And if the sector is going to have a fighting chance of reaching the SDGs by 2030, something has to change. Assuming similar financial investments to the last years of the MDGs, optimists suggest that universal basic access might be possible by 2030. To reach the even more ambitious SDGs, investment must triple, which will require greater political will to invest public sources and new sources of private investment and individual sources.

We have come a long way from the time of lawmakers in the UK covering up the stench of the Great Stink by spreading chemicals on the curtains of Parliament instead of addressing the root causes of the Stink. But there is still a long way to go in ensuring that all 7bn of us have a toilet that we use. And even further to go until the waste from billions of toilets end up where they should. But with more and more professionals starting to take systemic sanitation seriously, I’m hopeful that we’re a wee bit closer.

Download pdf