Improving access to and quality of watersupply and sanitation (WSS) services is emerging as a keyobjective in poverty alleviation. The importance of accessto improved water supply and sanitation has been even morepronounced since it was declared a target of the MillenniumDevelopment Goals (MDGs) in 2000. The achievement of theMDGs will require a large investment program that will helpincrease access to safe and sustainable water and sanitationservices. The majority of the funds for the sector are stillprovided for by the government at central, provincial orlocal levels. Although additional resources may be urgentlyneeded, research in other social sectors (health andeducation) has also shown that higher public expenditures donot necessarily result in better social outcomes. Gaps inachieving outcomes can be due to: a) sub-optimal spending,due to inefficient allocation of resources, discretionaryreallocation of resources, inappropriate policies andinstitutional incentives, or poor targeting of resources; b)low quality of service delivery due to inefficiencies inservice delivery; and c) lack of demand from certainsegments of the population. A lot of effort has beendedicated to increasing resources to achieve the MDGs, butthe size of the required investments can be substantiallyreduced if the efficacy, efficiency, and quality of publicexpenditures in the water and sanitation (WSS) sector can beincreased. Looking into the efficiency of public expenditureprograms in the WSS sector is complicated. More so than inother social sectors (health and education), the WSS sectoris characterized by highly decentralized service deliverythat makes data collection more challenging.
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