Technical and Scale Efficiency of the Brazilian Municipalities’ Water and Sanitation Services: A Two-Stage Data Envelopment Analysis

Abstract

Seeking to “ensure availability and sustainable management of water and sanitation for all” is an admirable Sustainable Development Goal and an honourable commitment of the United Nations and its Member States regarding the human right to safe drinking water and sanitation services (WSSs). However, the majority of countries are not on target to achieve this by 2030, with several of them moving away from the best practices. Brazil is one of these cases, given, for example, the existing asymmetries in the access to water supply and sanitation service networks. For this reason, we propose a benchmarking exercise using a two-stage Data Envelopment Analysis to measure the technical and scale efficiency of the Brazilian municipalities’ WSSs, noting their contextual environment. Our results point towards low mean efficiency scores, motivated by the existence of significant scale inefficiencies (the vast majority of municipalities are operating at a larger than optimal scale). Furthermore, the Water source was found to be a statistically significant efficiency predictor, with statistically significant differences found in terms of Ownership and Geography. Ultimately, we suggest policy-making and regulatory possibilities based on debureaucratization, the implementation of stricter expenditure control policies, and investment in the expansion of WSSs.