Bribery in the Water Sector: Evidence from the Installation of Smart Meters

Water companies in developing countries typically measure a household’s water consumption with in-person inspections by meter readers who collect hand-written records. This system is susceptible to bribery. Customers and meter readers can collude to underreport the actual water usage, which both reduces revenues for the water company and drives up water consumption. This pilot project explores the feasibility of a study in Livingstone, Zambia that would randomize the rollout of “smart meters.” Smart meters send water meter data directly to the water company via a communications network (e.g., cellular or radio). The full-scale study would measure the impact of smart meters on underreporting and on actual water consumption. The project sheds light on the broader research question of whether the benefits of bribery are regressive: How does the extent of bribery and the demand response to a crackdown in bribery vary with household income?