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Government expenditure on infrastructure has been high in most developing countries. However, though access to services has broadened, the general condition of infrastructure is poor, and the quality of service has deteriorated. Water services is a good example of this problematique. / The purpose of this thesis is to provide a demand-oriented perspective on water provision for domestic users. The thesis examines cost recovery potential based on household willingness to pay more for an improved service and water pricing. Also, factors contributing to rising provision costs are explored, with the aim of formulating prescriptions for demand management and lowered costs. The thesis also focuses on institutional strengthening scenarios which achieve a demand orientation in water delivery. To this end, competition in the provision of water services and the regulation of service providers are examined. / A case study of domestic users in Trinidad was undertaken. Households in the main urban area were surveyed to test willingness to pay for water improvements using a questionnaire which incorporated three methodologies; contingent ranking, contingent valuation and the household production function. The household production function examined the revealed preference of consumers, whereas the contingent ranking and contingent valuation considered the stated preference for different features of the water service. / The survey found that most consumers were willing to pay more than twice the current price of water, contingent upon a guaranteed improvement in service, particularly reliability. The main factors influencing willingness to pay were household income, the price of water, number of service hours, and housing and land tenure. The results indicate that while the potential for cost recovery does exist, formulating demand-oriented water policies with a focus on improved reliability is necessary. / Extensive interviews were also conducted with professionals from both local and international agencies involved in the water sector, to elicit their perspectives on the problems of water agencies and possible solutions. There is a consensus among sector professionals that water agencies should emphasize improvements in operational performance, system maintenance and rehabilitation, and quality and reliability of service, instead of increases in capacity through new investments. Professionals took the common position that institutional capacity building was needed to achieve these results.

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