Local institutions matter : decentralized provision of water and sanitation in secondary cities in Honduras

This report is an analysis of the experiences of 16 different water supply and sanitation systems of comparable size over the past decade in secondary cities in Honduras. Honduras provides an example of centralized and decentralized operators existing simultaneously. The comparative analysis will focus on three areas: (1) access (coverage, rationing and treatment of water supply); (2) efficiency (production, commercial, and financial); and (3) sustainability (decision making, tariffs and subsidies, and capital investment capacity) of centralized versus decentralized providers while at the same time identifying the benefits and limitations of decentralized provision of these basic services. The results of this analysis suggest that local institutions are driving change in the water and sanitation sector. They are the most efficient in the provision of basic services, and the more likely of the two to achieve sustainability. Finally, this analysis and the recommendations for strengthening the local institutions aim to fill a research void in Honduras. These lessons, as well as an identification of areas where improvements are necessary, provide input into the upcoming transition toward the almost universal decentralized provision of water and sanitation services as legislated by the framework law.