The determinants of performance in water service delivery: an analysis of municipalities in Ghana

ABSTRACT This study explored the determinants of the performance of rural and municipal water management companies in Ghana during numerous protests over service quality and costs. Using an output-oriented data envelopment analysis (DEA) model, the study measured the technical and scale efficiencies of 23 utilities. The results showed a technical efficiency of 0.81 for municipal utilities and 0.69 for district utilities, indicating that municipal utilities could optimise outputs by 19% to achieve technical efficiency. In contrast, district-level utilities require 31% to attain comparable outputs. The analysis reveals an average revenue slack per capita of 0.55 for municipal utilities, contrasting sharply with 1.00 per capita for utilities in districts. A robust multiple linear regression analysis identified significant performance determinants, including human resources, institutional governance, democratisation, and local context. Additionally, the findings suggest that an increased donor inflow only leads to improved service delivery when accompanied by effective budgeting and expenditure monitoring systems. The application of the DEA technique provides a framework to assess, monitor, and benchmark the performance of water utilities to offer actionable insights that inform policy and management decisions to enhance service improvement and efficiency gains.