I grew up in London, so I grew up with the River Thames. I’ve rowed along it, canoed on it, and walked across it more times than I can count. It is now one of the cleanest rivers in the world, a remarkable achievement considering it was once so polluted it was declared biologically dead. In 1815, London’s cesspools were connected to the sewers that ran into the Thames, from which water companies drew their water. The growing popularity of the flushing WC meant that by 1856 nearly 81 million gallons of water were used in London every day – a significant proportion of which went from toilet to Thames and back to Londoners as usable water.

It was only once London was gripped by the ‘Great Stink’ in 1858 that politicians finally resolved to clean up the river and reform the city’s sanitation: four pumping stations, three new embankments and 82 miles of new sewers later, London celebrated a dramatic reduction in waterborne epidemics such as cholera and its lowest death rate since 1850.

It’s much easier to get excited by the advances in technology and infrastructure that enabled our Thames to be what it is today. But what we don’t often hear heralded is how it was funded, which in London’s case was by its people. As the UK, and other Western nations, for that matter, is grappling with how infrastructure is holding up with current population booms, we will need to revisit how projects that significantly impact public health and development are funded and directed. As we stand, we are hardly the model sanitation system for the city of the future.

4765938039_e2f1c8dc5b_z
Fleet Street Sewer. Photograph: sub-urban.com, CC Image from Flickr

Achieving universal water, sanitation and hygiene (WASH) coverage by 2030 could cost from US$14-47 billion per year. This is a staggering sum and one that current financing levels aren’t close to covering. When we talk about WASH, and international development as whole, the focus on the private sector, markets, entrepreneurial innovation and donor ODA strategies means that public finance (i.e. taxes) is often overlooked. But long-term, costly projects with distant payoffs need stable and sustainable revenue sources from equitable taxes, tariffs and transfers from central governments.

The amount spent on improving Victorian London’s drainage was immense. Investment in water and sanitation in most of Britain’s major cities was financed by commercial loans or soft loans from the national government, repaid by residents’ property taxes. National legislation such as the 1848 Public Health Act authorised municipal authorities to raise revenue locally for infrastructure projects. Water and sanitation improvements in the USA were driven forward by national and local governments rather than private providers. Most cities used municipal bonds to finance infrastructure projects, alongside property taxes, water levies and service tariffs.

WaterAid’s recent report on East Asia’s rapid journey to total hygiene and sanitation coverage is enlightening: high-level political leadership supported by official finance sources (primarily government revenue), were crucial for WASH improvements. Take, for example, South Korea, who enjoyed a significant foreign aid windfall in the 1960s, but had to find new revenue for WASH development as the aid was time-limited. Taxes were initially the main source of funding until they were superseded by tariffs. They were a country with a GDP per capita level of US $155 in 1960 (lower than Ghana’s US $183 in the same year) that reached 100% improved sanitation coverage only 40 years later. And Ghana? Its improved sanitation coverage in 2015 was only 15%.

There is no one explanation for this coverage gap between Ghana and South Korea. After all, the two countries have vastly different histories, economies, geographies… (the list goes on). What we can point to are weaknesses in tax collection capacity and how that impacts WASH budgets in sub-Saharan Africa. Tax revenue in EU countries averages 19% of GDP, but countries in SSA (those with available data) collected an average of only 13.7% of GDP in 2012 through taxation. The will to extend WASH coverage might be there, but it cannot translate to significant change unless revenue collection and governance capacity are improved. This isn’t an easy fix: it is notoriously difficult to raise domestic revenue from economies with significant informal and agricultural sectors, for example.

Donors and national governments are now paying more attention. Uganda’s tax authority (URA), for example, struggled to raise revenue until recent reforms closed loopholes and high earners were identified and properly taxed. Almost half of low-income and lower-middle-income countries in sub-Saharan Africa are now close to increasing government revenue as a share of GDP by 20%. In 2013, US $700m of ODA was spent on strengthening national governments’ capacity to raise domestic revenue. This is encouraging – tax reform and domestic finance might not be the most exciting of topics but they are crucial for sustained development. If international development practitioners really want to make sure that their jobs become unnecessary (because in the end, that’s the aim, right?), then we need to talk about how largescale projects that deliver significant public health benefits are funded for the long term.

Further reading/references:

J Benedickson (2011), The Culture of Flushing: A Social and Legal History of Sewage

J Fisher et al (2005), Learning from the past: delivery of water and sanitation services to the poor in nineteenth century Britain

D Hall & E Lobina (2012), Financing water and sanitation: public realities

S Halliday (2013), The Great Stink of London: Sir Joseph Bazalgette and the Cleansing of the Great Metropolis

J Hassan (1985), The Growth and Impact of the British Water Industry in the Nineteenth Century

CE Rosenberg (1987), The Cholera Years: The United States in 1832, 1849, and 1866