Internalizing Environmental Externalities: A Coasean Approach to Urban Solid Waste Management in Kampala, Uganda

This summer, with the support of the Wrigley Institute Graduate Fellowship, I am leading the next phase of a research project in Kampala, Uganda. My work sits at the intersection of economics and the environment, and it focuses on a problem that has drawn surprisingly little attention in the academic literature, and yet affects the daily lives of millions of people across the developing world: the disposal of household waste. 

The Problem

Kampala is a rapidly growing city built across steep hills. To manage heavy rainfall, the city has lined those hills with concrete drainage channels. Over time, however, the channels have also become a convenient place for households to dispose of their waste. When it rains, that waste washes downhill and accumulates in the channels below, where it obstructs the flow of water and causes flooding.

The cost of this practice is distributed unevenly. A household near the top of a hill experiences little of the harm it creates, because the rain carries its waste away. The households at the bottom of the hill bear that harm directly, despite having played no part in causing it. Because lower-lying land tends to be the least expensive, those downhill homes typically belong to the families with the fewest resources to recover from a flood.

The Project

My project evaluates a simple and inexpensive intervention. We install nets within the drainage channels. Each net retains solid waste while allowing water to pass through, intercepting the waste close to its source rather than permitting it to travel downhill and collect below. The greater challenge is not the net but its maintenance, since the net must be emptied regularly. This is where the study turns from a question of engineering to a question of cooperation. In treatment villages, we convene a structured community meeting. Households downstream, who benefit most from an unobstructed channel, state what they would be willing to contribute toward maintaining the net. Households upstream, who would carry out the work of emptying it, state what they would require in return. The aim is to test whether neighbors can negotiate and sustain their own arrangement to keep the net functioning, rather than depending on the city to do so.

Progress and Next Steps

A small pilot conducted last year provided encouraging early evidence. In the villages that received nets, we observed less accumulated waste, less active dumping, and fewer reports of flooding. Households also proved willing to participate in the negotiation rather than dismiss it.

This summer, the study expands from a small number of villages to roughly thirty, reaching approximately 1,500 households. The larger scale is important because it allows us to measure the intervention’s effects with greater precision rather than relying on a few promising cases. Nets are assigned to villages at random, which lets us compare similar communities and attribute any differences in outcomes to the nets themselves rather than to other factors.

The most significant part of the work, for me, has been the time spent with policymakers at the Kampala Capital City Authority, the local government responsible for the city’s waste and drainage. Their feedback proved invaluable in developing the initial idea, and helping ensure that the intervention, if successful, would be relevant to the city’s needs and capable of scaling.

Why it Matters

Although this study takes place in Kampala, the problem it addresses is far from unique to the city. The volume of waste the world produces is projected to rise sharply by 2050, and the most rapid growth is concentrated in cities resembling this one. In many such places, a large share of waste never reaches a managed landfill, and municipal budgets are far too limited to collect it all. If communities can maintain a low-cost solution on their own, it provides meaningful relief to public services that cannot expand quickly enough. If they cannot, the results still help identify where the city’s direct involvement remains essential. In either case, the findings give local leaders concrete evidence to draw on as they decide how to allocate limited resources.

What the Fellowship Has Taught Me

My principal takeaway concerns what makes applied research credible. I began this work assuming that the most demanding part would be the idea itself. I have come to believe that the more demanding part is execution: measuring outcomes accurately and building strong trust with the communities involved. I am very thankful to the Wrigley Institute for supporting this research, and I look forward to sharing more once the project is complete.

Mychaela Paetow is supported by the Diane Sonosky Montgomery and Jerol Sonosky Graduate Fellowship for Environmental Sustainability Research.