Payment Attitudes to Public Services  in the Municipalities of Bangladesh

Payment Attitudes to Public Services in the Municipalities of Bangladesh

Abstract

The paper investigates the factors which influence households' willingness to pay for public services provided by municipal councils in Bangladesh. The analysis in the paper is based on a survey of all municipalities, with a sample size of over six thousand households. The survey data was  complemented  with  administrative data obtained  from offices of these local bodies. A multinomial logit model was used to investigate the factors (such as the rates paid by user households for public services, eg, water supply, etc. and socio-demographic characteristics of households, such as education, age etc.) which are significant in changing the probability of households' willingness to pay. The analysis was conducted with three different categories of households in the model, which differ in their attitudes to paying for the public services they use. The empirical results provide evidence that better public services significantly influence households' attitudes to paying more for the services, indicating that cost recovery-type of pricing policies may be used in the municipal areas, contrary to populist concerns. Thus, the municipalities may  well  be  gradually  'weaned  away'  from  dependence  on  grants  from  the government and instead, mobilize more resources locally to finance development.

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