Financing Municipal Water and Sanitation Services in Nairobi’s Informal Settlements

We estimate the impacts of two interventions implemented as field experimentsin informal settlements by Nairobi’s water and sanitation utility to improverevenue collection efficiency and last mile connection loan repayment: (i)face-to-face engagement between utility staff and customers to encourage paymentand (ii) contract enforcement for service disconnection due to nonpaymentin the form of transparent and credible disconnection notices. While we find noeffect of the engagement, we find large effects of enforcement on payment. Wealso find no effect on access to water, perceptions of utility fairness or quality ofservice delivery, on the relationships between tenants and property owners, or ontenant mental well-being nine months after the intervention. To counterbalancethe increase in payments, property owners increased rental income by renting outadditional space. Taken together these results suggest that transparent contractenforcement was effective at improving revenue collection efficiency without incurringlarge social or political costs