Economic assessments of small-scale drinking-water interventions in pursuit of MDG target 7C

This paper uses an applied rural case study of a safer water intervention in South Africa to illustrate how three levels of economic assessment can be used to understand the impact of the intervention on people's well-being. It is set in the context of Millennium Development Goal 7 which sets a target (7C) for safe drinking-water provision and the challenges of reaching people in remote rural areas with relatively small-scale schemes. The assessment moves from cost efficiency to cost effectiveness to a full social cost–benefit analysis (SCBA) with an associated sensitivity test. In addition to demonstrating techniques of analysis, the paper brings out many of the challenges in understanding how safer drinking-water impacts on people's livelihoods. The SCBA shows the case study intervention is justified economically, though the sensitivity test suggests ‘downside’ vulnerability.

► Social Cost–Benefit Analysis used to model the value of improved water supply interventions.
► Can be used to aid decision-making.
► Highlights vulnerabilities in water interventions.