Financial Narratives: Insights from Water Project Impact Evaluation

1. Stories in Numbers: Using Financial Indicators to Reveal Household and Community Narratives in Impact Evaluation of Water Projects Michael P. Canares HNU Center for Research and Local Governance

2. Structure of the Presentation • Conclusion • Background of the paper • Amplifications of the Measures Used • Implications on Impact Evaluation Research

3. Conclusion • While not a substitute to other qualitative and quantitative measurements, financial indicators have the capacity of revealing important stories from the perspective of beneficiaries and communities and reinforce, if not enrich, our understanding of program or project inputs, process, achievements, issues, and concerns.

4. Per capita cost of water development project, area classification compared Do these things mean something?

5. Problem with auditors and accountants • Static textbook concepts (e.g. lower per capita costs, the better) • Deskwork versus fieldwork (e.g. interpreting than experiencing) • Biased interpretations (e.g. costs over benefits)

6. The bias of this paper • Financial indicators are not to be read devoid of “stories from the field” • Financial indicators, as a matter of fact, tells “stories from the field” • Financial indicators reveal strong evidence on outcomes and impact to supplement qualitative representations

7. Indicator 1 (HH): Cost of Getting Water Traditional comparison of Y1 and Y0 Cost of getting water is computed using per unit costs (e.g gallon or liter)

8. Household Narrative and Conclusions ‘Before the project, we get water from the pump owned by our neighbor. She charges us 5 peso per gallon. Every week, we consume around 10 gallons. Now, we pay 50 pesos a month for our Level II water system.’ This is informative but insufficient. For example, the ‘neighbor’ is two kilometers away, and walk is about 40 minutes due to steep terrain.

9. Financial Indicators and Conclusions The indicator expands cost of water by including labour opportunity costs, as well as the differential costs of access due to geographical limitations. Limitation: There is an implicit assumption that it was productive labour that was affected. What if children are the ones who fetch the water from the source?

10. Indicator 2(HH): Released Financial Resources • Indicates amount of funds released for other household expenses • May be expressed as a percentage of household budget or as a consumption unit in other goods

11. Financial Indicators and Household Narratives ‘Because water came cheap, we are now able to spend more on other needs of the family.’ Limitation: There is an implicit assumption that freed up resources are used for food and essential consumption items. This may not be true when freed up resource is used for betting on a numbers game.

12. Indicator 3(CO): Replacement Capacity • Indicates the ability of the water service provider (association) to construct the same water service facility after end of useful life of current one

13. FIs, Community Narratives, and Interpretations ‘The facilities’ useful life is 15 years. This means we need to raise sufficient funds to be able to construct it on our own in the long term.’ The association’s options need to be pointed out – increasing water rates, minimizing costs.

14. The indicator gives a good sense of how much funds are needed to implement a particular project in similar circumstances, as long as context is equally analyzed. Indicator 4 (DA): Per Capita Cost of WDP

15. What are the implications of these on impact evaluation research? • Early on, data needed for financial analysis needs to be incorporated as part of baseline data generation • Research design should consciously incorporate financial indicators to investigate commonalities and variations

16. Many thanks for the kind attention.