Environment for Development

1.      Determinants of Performance of Drinking Water Community Organizations: A Comparative Case Studies Analysis in Rural Costa Rica

This is an institutional analysis of the underlying factors that affect the performance in the provision of drinking-water by community organizations. These organizations, locally called ASADAS (Administrative Associations of Aqueducts and Sewerage Systems), provide water to more than 60 percent of the rural population. The study was conducted in 40 communities in rural Costa Rica to explore how a complex configuration of geophysical characteristics of watersheds and infrastructure, and governance and socioeconomic attributes of local users affect three dimensions of performance: financial health, infrastructure condition, end-user satisfaction. A qualitative approach and matching techniques were used to ensure comparability among cases.

The main results of the study suggest (i) there is great disparity in performance across water Associations across communities. And (ii) there are three main conditions that promote higher levels of performance were:

• relevance of a demand-driven approach coupled with downward accountability
• working rules for tariff collection and infrastructure maintenance
• appropriate support from the government

This study is an example of a bottom-up approach for policy change. Several indicators were developed to evaluate the three dimensions of performance. The results of the study were disseminated in the participating communities through workshops. The information provided helped local leaders identify ways to improve performance in the provision of potable water. Furthermore, the information was shared with representatives of the ICAA (Instituto Costarricense de Acueductos y Alcantarillados); this is the Costa Rican Water Authority. The results captivated the interest of ICAA to develop a scheme based on the performance indicators to implement it nationwide. However this has not been done by ICAA. Also the study provided evidence of the need to target government assistance to communities with less performance capacity.

2.      Financing of State Protected Areas (series of studies)

Several studies have been done on methods to improve financing of State Protected Areas (SPAs). Some of them provide clear examples of how decision-making by government authorities is starting to be informed by research based results. In specific, optimal entrance fees to SPAs in Costa Rica is now set according to price discrimination and technical recommendations. This is relevant because entrance fees are currently one of the main sources of funding for the Costa Rican System of SPAs. A key partner in this initiative has been the Costa Rican office of The Nature Conservancy (TNC).

Another study contributed to creating a methodology to estimate the costs of concession of non-essential services within SPAs. This type of concession is governed by the country’s Biodiversity Law of 1998. A first study was based in the Chirripó National Park. The office TNC was a key partner in the project. The methodology created by EfD-CA has been approved by CONAC (National Commission of Conservation Areas) as the official method for estimating the costs in the concession of non-essential services in SPAs. Is probable EfD-CA may replicated the study to determine the costs of the concession of non-essential services of room and board, rental of outdoor equipment, souvenir store, transportation of material and equipment, and guiding in the Corcovado National Park and the concession of tour operations in the Marino-Ballena National Park.

A third study requested by officials from Cahuita National Park is exploring a fund raising strategy based on pro-social behavior. This study is relevant for policy makers because it fills the gap on the connection of the importance of conservation for tourism and vice versa but adds the question on how relevant is this for communities around protected areas. This research program (in consultations with Park officials and local leaders) was focused on how donations are affected by individuals’ behavior in a social context. It assesses the effects of an imposed suggestion on how much to donate; the presence of other individual and contexts; and one´s beliefs with regards to the behavior of others. An important feature of this case is that is being conducted in a State Park that is co-managed by the government and the local community. Thus, it opens a window of opportunities to further explore the impacts of co-management of SPAs in Costa Rica. In turn this issue is closely link to the concession of non-essential services in SPAs.

3.      Studies that evaluate the impact of policy changes

EfD-CA has conducted research that was not aimed at changing actual policy but to assess the impact of a change in policy informed by other sources.

One example is the study on Fuel Tax Incidence in Costa Rica. This analysis contributed to a more accurate evaluation of the effects of the driving restrictions on transport fuel sales in Costa Rica by accounting for changes in fuel prices over time, as well as changes in the vehicle fleet. The study used data from a 2005 household income and expenditure survey and a 2002 input-output matrix. The analysis was done by: estimating of the upper and lower bounds of total monthly expenditure; identifying monthly fuel expenditures; calculating the average expenditure on fuel taxes as a percentage of total expenditure; comparing these averages of expenditures devoted to taxes; and measuring income inequality. The results suggest that increases in gasoline taxes, imposed to mitigate vehicle negative externalities or for other reasons, would not exacerbate income inequality since wealthier strata would bear most of the burden of the increase. But increases in diesel taxes have a greatest effect on lower and middle income strata. Policy makers can avoid adverse distributional consequences of fuel tax hikes by differentiating taxes on diesel and gasoline and reserving steep increases for the latter which is being practice in Costa Rica.

Another example is the study on Costa Rica’s Payment for Environmental Services (PES) that evaluated the intention, implementation, and impact of Costa Rica’s PES program. Payments are given to private landowners who own land in forest areas in recognition of the ecosystem services their land provides. To characterize the distribution of PES the study combined remote sensing with geographic information system databases and then used econometrics to explore the impacts of payments on deforestation. Payments were distributed broadly across ecological and socioeconomic gradients, but the 1997–2000 deforestation rate was not significantly lower in areas that received payments.

Yet the implementation of the PES Program reduced deforestation rates between 2000 and 2005 by a small amount (only 2% of the land enrolled in the program would have been deforested), the program’s potential for impact was increased by explicitly targeting areas with deforestation pressure and increasing some payments to enroll land that would have been cleared. This impact is greater if the results are compared with the 1997-2000 period in which reduction in deforestation rates is estimated to be 0.6%.

Other successful Costa Rican conservation policies, including those prior to the PES program, may explain the current reduction in deforestation rates.

4.      Future research needs in relation to these issues:

• Research to address climate change impacts on the provision of potable water services by ASADAS and performance their performance.
• Studies on institutional approaches to increase capacity in communities that lack assistance to improve capacity
• Creative schemes for financing on State Protected Areas
• Comparative studies of ecosystem services schemes