[ ▸ Abstract | Paper | ▸ Partners ]

Partners: International Growth Centre, Suntory and Toyota International Centres for Economics and Related Disciplines, Innovations for Poverty Action, DataPlas Ghana

Urbanisation generates powerful agglomeration benefits but also severe congestion externalities that require regulation and public goods provision. In developing megacities, governments lack the fiscal and enforcement capacity to implement textbook solutions. In their absence, unregulated private provision emerges across sectors such as waste, sanitation, water, and transport, leaving externalities largely unaddressed. What can economics offer cities that cannot implement textbook policies? We study whether limited, feasible regulation can leverage informal markets to deliver public services at scale, focusing on trash collection in Accra, Ghana. Using novel data, we document an imperfect but functioning market: households pay informal tricycle collectors for door-to-door collection, yet prices remain too high for universal access, and final disposal occurs largely at illegal dumpsites. We identify a single feasible policy lever—subsidies for formal, environmentally controlled disposal—and evaluate it using a new structural model of urban waste collection and disposal. To estimate the model, we combine survey experiments to elicit household demand, a custom app to record transactions and tricycle routes, and a field experiment randomising dumping fees. Counterfactual results show that a modest subsidy achieves roughly 80% of the efficient outcome, substantially reducing environmental damages while generating larger welfare gains at lower cost than planned infrastructure expansion. These findings demonstrate that even in very low-capacity environments, limited price-based regulation can align informal private initiative with social objectives.

[ ▸ Abstract ]

Urban density promises agglomeration benefits but also gives rise to pollution and disease transmission. Large-scale sanitation investments may therefore be essential to harness the benefits of density by increasing the attractiveness of locations as residential and marketplaces and by reducing negative sanitation externalities. To study how sewerage investments shape the long-run development of cities, we compile a novel address-level dataset spanning the entire construction period of the Parisian sewerage network during the nineteenth century. We present event-study evidence on how sewer construction affected population density, firm locations, land values, and disease incidence. Preliminary findings suggest an increase in land values and an increased presence of service and retail businesses in locations that received sewer access during the main expansion period. Leveraging an urban model, we structurally estimate the impact of sewers on location-specific amenities and location–sector-specific productivity, as well as the strength of externalities. Through counterfactual analyses, we assess the welfare impacts and cost–benefit of sewerage investments and disentangle the general equilibrium channels through which sewerage investments shaped the development of modern Paris.

[ ▸ Overview | Paper ]

This paper focuses on how city leaders can deliver clean water and sanitation efficiently, affordably, and at scale. It first explores how to choose the right technologies for different urban contexts, balancing cost, density, and long-term maintenance. It then considers who should provide these services, from public utilities to public–private partnerships and informal providers, and how governments can structure their involvement. The paper next examines how to finance water and sanitation systems, from major trunk infrastructure to household connections and ongoing maintenance, and how to incentivise household uptake through subsidies, fines, and microfinance. It also looks at how to shape behaviour through information campaigns and social norms, and how to strengthen institutions, regulation, and contracting to make these systems work sustainably. Together, these sections provide a roadmap for cities to turn water and sanitation investment into lasting health, productivity, and environmental gains.

[ ▸ Overview | Paper ]

Water, sanitation and hygiene (WASH) systems are fundamental to healthy and productive cities. Yet as urban populations grow rapidly, many cities struggle to expand and maintain safe water and sanitation services. Poor WASH infrastructure increases exposure to infectious disease, reduces labour productivity, and imposes disproportionate costs on low-income households. This policy brief outlines four key principles to help governments expand safe and affordable water and sanitation services in rapidly growing cities.