Determinants of private investment contracts in the basic sanitation sector: evidence for developing countries

Investment in infrastructure, including universal access to water and sanitation services, is crucial for improving the quality of life and promoting economic development. Access to clean water and proper sanitation is particularly important for public health. This article, based on the work of Yehoue et al. (2006)and Sharma (2012), explores the factors that determine the number of private investment contracts in the basic sanitation sector. The study employs an empirical analysis, utilizing a panel of developing countries over the period of 2003-2016, and employs the Zero Inflated Negative Binomial (ZINB) counting estimator to examine the number of contracts in the sanitation sector. Additionally, for robustness analysis, we also analyze the Negative Binomial, Poisson, and Zero Inflated Poisson (ZIP)models. The results of the study indicate that the macroeconomic environment, foreign investment, and political environment are the key factors that influence the number of private investment contracts in the sector.