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Submitted by Shanta on

First, Nachiket, thanks for replying to Shaeena's comment. This is exactly the kind of exchange I like to encourage on the blog. The only thing I would add is that we should not in general expect poor people to take the short route. Unfortunately, this is the route they are forced to take because of failures in the long route. Poor people are forced to buy water from private tankers at 5-16 times the meter rate. They take their sick children to (possibly unqualified) private sector doctors because there is no one at the public clinic. This is not a desirable outcome. But changing it requires making the long route work for the poor. In some cases, it may take market-like mechanisms, as Nachiket shows. But in other cases, it would require changing the "politics" leg of the long route. By the way, vouchers are unlikely to work not because of supply-demand mismatch, but because they undermine the rents of public school teachers (who now have to compete with private schools in order to get paid). But unless we are able to overcome this resistance, poor people will continue to be forced into the short route. Shanta