Changing the behaviour of water users towards more sustainable practices is a necessary step in achieving water security. One way to promote such change is through economic instruments. Economic incentives involve the use of prices and other market-based measures to improve the way water is managed and used. They provide incentives to water users to use water carefully, efficiently, and in a manner consistent with the public interest. They have both positive and negative effects, rewarding users that recognise the true value of water and penalising profligate and anti-social use.

In Chile, water has been privatised. However, in order to make sure that access was still available to all strata of society, the privatisation was accompanied by a robust regulatory framework, including a system of direct subsidies for drinking water consumption and sewage services for low income households. This case thus illustrates that in case of privatisation, a direct subsidiary scheme should be considered. 

The legal and regulatory framework of water utilities in Peru provides opportunities for local financing of investments. Despite this, the sector remains heavily dependent on public financing. Action has been taken by the World Bank to initiate a study investigating the barriers to local private funding. This case study illustrates that public loans, private loans and equity investment are appropriate to fund the necessary investment. 

This brief addresses the contributions of water to various sectors of economic and social life and, subsequently, to broad development goals. It aims to further the recognition of these contributions and the inclusion of water practitioners in development planning processes, so that water can prioritised adequately. Policy briefs provide policy makers with information on water resources management. They are written by the GWP Technical Committee, a group of internationally recognised professionals in integrated water resources management.

ToolBox: Auxiliary texts to training on IWRM in the context of EU Water Policy

Financial Flows and Affordability in Water Resources Management in the CEE region