2001年-世界发展银行全球_Incentive-Based_Subsidies___Designing_Output-Based_Subsidies_for_Water_Consumption_4页_338kb

Chile's Water Consumption Subsidy Case Study Summary

Core Content

Chile introduced an individual means-tested water consumption subsidy in the early 1990s to ensure affordable water and sanitation services for vulnerable households. This approach was designed to reduce the financial burden on the government compared to previous universal subsidy schemes. The subsidy is funded through general taxation, allowing the regulator to set tariffs based on economic criteria.

Main Viewpoints

• Targeted Subsidy Mechanism: Chile's subsidy targets low-income households based on their ability to pay, using a Comprehensive Assistance Score (CAS) system. This ensures that resources are directed to those who need them most.
• Private Sector Involvement: Most water services are delivered by private companies, which are incentivized to provide efficient and reliable service due to reimbursement for subsidies based on actual consumption.
• Incentive-Based Design: The subsidy is structured as a rising block tariff, where only consumption up to 15 cubic meters per month is subsidized. Households pay the full tariff for any consumption beyond this limit, promoting efficient water use.
• Affordability Focus: The subsidy aims to make water consumption affordable, not connection. This is crucial in a country where connection is almost universal.
• Administrative Structure: The central government funds the subsidy, while municipalities administer it. The Undersecretariat for Regional Development oversees the program and ensures compliance with the annual budget.

Key Information

• Subsidy Coverage: The subsidy can cover 25–85% of a household's water and sewerage bill for up to 15 cubic meters per month.
• Eligibility Criteria:
  • Households must not have payment arrears.
  • Subsidies are awarded based on CAS scores, which are calculated using a 50-question survey covering socioeconomic variables.
  • The CAS score is valid for two years and can be used for multiple subsidies.
• Implementation:
  • Municipalities are responsible for applying the subsidy, based on CAS scores.
  • Subsidies are renewed annually for up to three years.
  • If a municipality runs out of subsidies, it must reassign them to more eligible households.
• Cost Efficiency:
  • In 1998, US$33.6 million was spent on subsidies, benefiting 13% of households.
  • The cost was significantly lower than previous universal subsidy schemes.
  • Water companies reported a surplus of 4% of assets and net profits of US$107 million.
• Impact on Households:
  • The subsidy represents a larger share of income for poorer households, nearly 8% for the lowest income group.
  • 52% of subsidies go to the three lowest income groups, while 23% leak to the top five.
• Lessons Learned:
  • Metering is essential for consumption-based subsidies. Chile has near-universal metering in urban areas.
  • Institutional capacity is required for effective implementation, particularly at the municipal level.
  • Geographic targeting may be a more viable option for countries with limited administrative capacity.
  • Connection subsidies may be more cost-effective than consumption-based ones, as they require less frequent monitoring.

Challenges

• Late Payment Issues: Municipalities often fail to pay water companies on time, leading to interest charges and debt costs.
• Administrative Costs: While Chile uses the same CAS system for multiple subsidies, individual subsidies can be costly to administer.
• Potential for Inequity: In some cases, higher-income households may receive a portion of the subsidies, raising concerns about targeting accuracy.

Conclusion

Chile's water subsidy system demonstrates how targeted, incentive-based subsidies can support equitable service delivery while reducing government costs. The system's success is tied to metering infrastructure, strong institutional frameworks, and efficient coordination between government and private providers. However, for replication in other countries, consideration of local conditions and simplified targeting mechanisms may be necessary.