Water pricing in Tunisia: Can an original rate structure achieve multiple objectives?

Abstract

In the context of anthropic pressures, the Tunisian Water Utility tries to achieve three objectives: financial (achieving full-cost recovery), social (ensuring access for all), and environmental (incentivizing users to save a scarce resource). After a theoretical review of water pricing, the paper presents how successive reforms in Tunisia have gradually set up an original pricing structure that has become the main instrument of the sector's policy. Using different data and methods, we investigate how each of the three objectives is reached through pricing. We conclude that this pricing policy has led to a relatively stable but partial equilibrium.