This book systematically examines the targeting performance of consumer utility subsidies in 32 programs from 13 water utilities as well as a similar sample of electricity utilities. Most of the programs involve volume-based subsidies, which are common in the water sector.

 

The results are sobering. The quantity-based subsidies practiced by about 80 percent of utilities surveyed are starkly regressive. In fact, poor households capture only half as much of the value of the subsidy as they would if the subsidies were distributed randomly across the entire population.

 

Many poor households are excluded from subsidy programs altogether, because they are not connected to the network. The book also examines why subsidies are regressive and proposes alternative means to target the poor.