Cost Effectiveness of Water Supply Technologies in Rural Indonesia: Evidence From Nusa Tenggara Barat

Abstract

The supply of adequate safe water to households in rural Indonesia remains a problem despite considerable government effort. Causes include lack of funds, the administrative shortcomings of water supply authorities, and inadequate consultation with the communities involved. The choice of water supply technology is crucial, because the alternatives vary widely in cost and in the demands they place on the organisational and technical capacity of water supply authorities and village communities. This paper compares the average incremental costs, in both financial and economic prices, of various technologies used in rural Indonesia, and discusses how to estimate their economic benefits. It shows that installing improved traditional wells and simple piped systems and rehabilitating large scale piped systems in Nusa Tenggara Barat province is likely to increase economic welfare, while installing new large scale piped systems may not. Finally, a distributional analysis of the different technologies is used to trace their beneficiaries.