Possible Adverse Effects of Increasing Block Water Tariffs in Developing Countries

The use of increasing block water tariffs is widespread throughout developing countries. An increasing block tariff (IBT) is a price struc- ture in which a commodity is priced at a low initial rate up to a specified - volume of use (block), then at a higher or several increasingly higher • rates for-additional blocks used. The ordinary household municipal- water bill in developing countries is often calculated on some sort of " IBT structure, and donor organizations and consultants continue to recommend this practice for town and city water systems. The major- ity of World Bank-sponsored water tariff studies conducted since ^ 1970, for example, have recommended the use of increasing block'^ water .tariffs.