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This paper explains the Asian Development Bank's (ADB) position on user charges and shows the issues that influence this position.

TitleSetting user charges for public services : policies and practice at the Asian Development Bank
Publication TypeBook
Year of Publication2003
AuthorsDole, D
Secondary TitleTechnical note /ERD-ADB
Volumeno. 9
Paginationvii, 27 p. : 4 tab.
Date Published2003-12-01
PublisherAsian Development Bank
Place PublishedManila, Philippines
Keywordsevaluation, international organizations, policies, poverty, sdipol, tariffs, uebw, water supply charges
Abstract

This paper explains the Asian Development Bank's (ADB) position on user charges and shows the issues that influence this position. ADB believes tariffs should: be simple, transparent, and predictable; ensure financial sustainability without subsidies, with a few exceptions; help the poor satisfy their basic needs, if other means are not feasible; promote efficient use of resources; and avoid cross-subsidies. A review of ADB's practice in tariff-setting shows that ADB pays the most attention to financial issues, and to avoiding financial hardship for the poor and less to economic issues. The reviews suggest that to clarify and emphasize ADB's position and to improve both policies and practice, ADB should: define and interpret some parts of ADB's position; provide technical guidance on efficiency and analyzing subsidies; focus on delivering services to the poor, rather than merely avoiding financial hardship; and highlight the value added by ADB's involvement, by clearly and thoroughly presenting information on tariff-setting in projects supported by ADB. These improvements would also make application of ADB's position both easier and more consistent.

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