FS 3.4 Pricing Determinants in the Water and Sanitation Sector: A Quick View of Heterogeneity in Latin America and the Caribbean

Abstract

Water tariffs are used as a tool to balance objectives such as efficiency, accessibility, cost recovery, and environmental preservation. These competing objectives imply that water tariff structures must be adapted to local contexts and priorities to be effective, a reality that is especially relevant for Latin America and the Caribbean (LAC) due to its great geographical and temporal variability in water availability and demand. There are multiple factors that influence tariff structures in the water sector, but they can be categorized into four main groups: (1) environmental factors, (2) urban factors, (3) political and ideological factors, and (4) institutional and management. This fact sheet provides an analysis of the current status of these factors in LAC.