Progressive Public Utility Rates as an Income Redistribution Device in Developing Countries: the case of Municipal Water

The use of progressive public utility rates is one method by which several developing countries are attempting to redistribute income. In several cities of Venezuela, Colombia and Malaysia, for example, domestic water is priced at increasingblock rates, rather than the decreasingblock rates which are so common in the United States. ¹ Increasing-block or progressive rate structures are intended to charge according to the ability-to-pay principle, with little regard to cost of service.