Unintended Consequences of Sanitation Investment: Negative Externalities on Water Quality and Health in India

Kazuki Motohashi

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Abstract: Developing countries have increased sanitation investment to improve child health. However, scaling up latrine construction can cause water pollution externalities owing to insufficient infrastructure for the treatment of fecal sludge, offsetting the direct health benefits. I estimate the negative externalities of an Indian sanitation policy that subsidized the construction of over 100 million latrines. Exploiting geographical variations in soil characteristics that affect the feasibility of latrine construction, I find that this policy increases fecal contamination of rivers by 72%. Although the policy reduces diarrheal child mortality overall, this positive health effect is eliminated when upstream areas lack adequate wastewater infrastructure.

Date: 2026-07
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Published in Motohashi, Kazuki. "Unintended Consequences of Sanitation Investment: Negative Externalities on Water Quality and Health in India." Journal of Development Economics 182, (2026): 103793

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