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World Bank

By Michael Kremer, Edward Miguel, Jessica Leino and Alix Peterson Zwane


Abstract: Social norms and legal institutions often create common property rights in natural resources, limiting private investment. A randomized evaluation in Kenya suggests that infrastructure investments can reduce fecal contamination by 66 % at naturally occurring springs and 24 % in spring users ’ home water supply, cutting child diarrhea by one quarter. While households increase use of protected springs, travel-cost based revealed preference estimates of households ’ valuations are only one-third stated preference valuations and are less than one-tenth levels implied by health planners ’ typical valuations of child mortality. Simulations suggest that, as a result, private property norms would generate little additional investment, while imposing large static costs due to spring owners ’ local market power. However, social norms requiring continued open access to unimproved sources but allowing fees for protected spring water could be Pareto improving. Vouchers for improved water could closely approximate either

Year: 2009
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