Nonfunctionality of engineered water sources after two catastrophic cyclones-Sidr in November 2007 and Aila in May 2009-created acute scarcity of safe drinking water in coastal Bangladesh. The objective of this study was to estimate households' willingness to pay (WTP) for disaster resilient water sources in Dacope upazila of Khulna District in southwestern coastal Bangladesh. By applying the double bounded dichotomous contingent valuation method to a dataset of 250 randomly selected households, we found that the mean WTP is BDT 263 and that inaccessibility to functional safe drinking water sources is the most significant determining factor of households' WTP. Projecting mean WTP for a disaster resilient water source project in the study area, we measured a present value of aggregate WTP over project's life span worth about BDT 624 (USD 7.37) million, which is about 14.30 times the present value of project's aggregate establishment and maintenance cost. However, charging the local inhabitants a water tariff at mean WTP would lead to the exclusion of around 50% of the people from getting access to the improved water services or create a free riding problem. Through simulation exercises this study determined that the socially optimal water tariff is BDT 50 per month. This tariff would not only generate revenue of more than five times the project cost but would also create access to disaster resilient improved drinking water sources for almost 99% of the people.
PurposeStatus of fiscal health of local governments helps in determining planned budget and realistic action plan for citizens’ wellbeing. This paper aims to assess the fiscal health of local governments in Bangladesh.Design/methodologyUsing data from 18 south-western municipalities of Bangladesh during the fiscal year 2018–19, this research measures fiscal health by applying Wang, Dennis and Tu’s solvency test and Brown’s Ten-Point Test.FindingsThe result shows that one-tenth of the entire municipalities are endowed with better position, whereas almost 39 percent of municipalities are in the worst situation and nearly 50 percent of municipalities are in the average category. Because of having limited liabilities, the municipalities are endowed with more than enough cash solvency and reasonable level of long-run solvency. The key problems are that budgetary solvency of all municipalities is not satisfactory, and service expenses are more than their revenue generation. This study suggests improving the financial capabilities of the municipalities through properly using their resources, generating loans, and claiming a need-based budget from the central government.OriginalityThe paper investigates the status of fiscal solvency of local governments in Bangladesh in a new dimension. The findings might be helpful to policymakers in budgeting for development initiatives of local governments in Bangladesh so that citizens’ better wellbeing is ensured.
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