The Political Economy of Urban Waste Recycling

The global volume of urban solid waste is projected to nearly double by 2025, presenting significant governance challenges for developing countries like Pakistan in managing recycling chains. State agencies often prioritize waste collection over recycling due to existing incentives, while informal recyclers, who rely on recycling for their livelihoods, face barriers such as limited access to materials, corruption, and inadequate technology.

This project explores whether assigning clear property rights over recyclable materials to private agents or implementing technology-based initiatives can improve recycling efficiency and reduce corruption. The study is based in Lahore, Pakistan, where waste management is divided between the state-led Lahore Waste Management Company (LWMC), responsible for waste collection and disposal, and informal sector actors who focus on recycling.

We have signed an MOU with LWMC to conduct a randomized controlled trial with four treatments. The first auctions trash containers to private agents. The second adds monitoring to ensure private agents' rights over recyclables. The third offers field supervisors a portion of auction proceeds as incentives, and the fourth allows private agents to use LWMC compactors to enhance storage and incentives. The control group will maintain the current system of state control over trash.

The insights from this research will highlight how governance constraints in waste management affect environmental outcomes and overall welfare. By exploring how governance improvements can enhance recycling efficiency and sustainability, the study offers valuable lessons for optimizing public service delivery in other developing countries hard hit by climate change and facing similar challenges.