At first glance, both cases seemed beyond saving.
In Phnom Penh, decades of war and instability had left the water system in ruins. Only around one-fifth of residents were connected to the formal network. The system itself consisted of a few hundred kilometres of ageing pipes, many more than 70 years old, and more than half of treated water was lost through leaks, theft, and illegal connections. Supply was intermittent, available for only part of the day, and the utility was financially insolvent and widely seen as ineffective.
Meanwhile, in Singapore, the challenge was not destruction but geography. With limited land to store water, the city-state depended heavily on imports from Malaysia, leaving it exposed to political pressure and supply uncertainty. Its future seemed tied to forces beyond its control.
And yet, both cases would go on to defy expectations.
Today, Phnom Penh provides clean, reliable water across the city, with a utility strong enough to be listed on the stock exchange. Singapore, while still importing some water, has developed the capacity to meet much of its own needs through innovation, recycling, and careful management.
If two such unlikely cases could succeed, failure is clearly not inevitable. So why do so many places still struggle? Lee Kuan Yew School of Public Policy’s Associate Professor, Leong Ching offers an answer in the 2026 Annual London School of Economics and Political Science (LSE) Behavioural Public Policy Lecture: “Not a Drop to Drink: How Behavioural Biases Keep Us from the Water We Need.”
The water paradox
“Water is essential to life but also one of the cheapest commodities that money can buy.” Professor Leong explains, “We know it is scarce, but we remain profligate in its use. We know it is expensive to produce, but we refuse to pay full price. We know recycled water is safe, but we don't want to drink it.”
Professor Leong says water policy is easy to design but difficult to get right.
The difficulty arises from water’s unique characteristics: it is essential to life, it is mysterious, and it is common in use. All these traits lead to certain biases.
“If we can recognise and understand these biases, then we can constrain, influence, and change them through water institution.” Says Professor Leong. “My argument is that institutions are foundational to collective action and the governance of water.”
Water is essential
Because water is necessary for life, it occupies a moral category unlike most goods.
People feel they have a right to a minimum amount of water. Profiting from water is viewed as unethical. People feel water should be free because it is naturally occurring. And water is seen as something that should remain under direct government control rather than outsourced to private companies.
These beliefs make pricing reforms, arguably the most straightforward policy tool, politically sensitive. Even when tariffs are clearly too low, raising them becomes a question of fairness rather than economics.
One common compromise is the use of tiered pricing systems, or increasing block tariffs (IBTs), where basic usage is cheap and higher consumption is more expensive. These structures are politically popular because they appear equitable. But in practice, they often fail to achieve cost recovery or significantly reduce wasteful consumption.
The result is a system that satisfies moral intuitions while falling short of practical goals.
Water is mysterious
Unlike electricity or fuel, water is difficult for consumers to evaluate.
You cannot easily tell whether water is safe by taste or smell. This encourages reliance on intuitive, fast thinking—often mistaken—and opens the door to psychological responses that override technical facts.
The most striking example is the resistance to recycled water. Despite decades of safe use in places like Singapore, many people remain uncomfortable with the idea of drinking what was once wastewater. This “yuck factor” persists even when individuals are fully informed about the purification process.
Research shows that information alone is often insufficient to change behaviour. Instead, social cues, such as knowing that similar others are willing to drink recycled water, can be far more influential.
In other words, acceptance is not just about knowledge. It is about perception.
Water is a common resource
Water is also a classic example of a shared resource. It is difficult to exclude users, and one’s overuse can impose costs on others.
This dynamic helps explain persistent problems in water systems across Asia. When supply is unreliable, households and businesses turn to their own solutions, such as buying water, storing it, or tapping alternative sources. These individual decisions make sense in the moment, but collectively they can strain systems and delay broader policy reforms.
Adding to this is what Professor Leong describes as a “paradox of resilience.” People adapt to shortages through coping mechanisms. These adaptations reduce immediate pressure on governments to act, even as they increase long-term risks.
The outcome is a cycle of underinvestment, overuse, and delayed reform.
The role of behavioural insights
If these patterns are driven by predictable biases, what can be done?
Behavioural public policy is often understood as a way to “correct” individual decision-making, for example, by nudging consumers toward conservation. But Professor Leong’s argument goes further.
Rather than merely correcting biases or introducing micro-interventions to improve individual choices, behavioural public policy also helps us interpret what public policy is. It shapes the social contracts and narratives through which policies become meaningful and legitimate. In this view, public rules and behavioural biases are one system, not two.
She suggests that biases are not simply errors to be eliminated. They are part of the social and political fabric within which policies operate. As such, effective policy must work with these biases, not against them.
This means designing institutions that:
- Acknowledge moral concerns about fairness
- Build trust in water quality and safety
- Encourage collective action in managing shared resources
Successful cases reflect this approach. In Singapore, for example, recycled water has been framed not just as a technological solution, but as a matter of national resilience and self-sufficiency. Pricing policies are paired with targeted support to maintain affordability, while still signalling the true cost of water.
Similarly, reforms in cities like Phnom Penh show that even politically difficult measures, such as raising tariffs, can gain acceptance when they are clearly linked to improved service and framed as benefiting lower-income communities.
Shaping systems, not just individuals
The lecture also connects to a broader debate in behavioural policy between focusing on individuals (i-frame) and systems (s-frame).
Water policy illustrates why this distinction matters.
Encouraging households to use less water is important. But without changes to pricing structures, infrastructure investment, and governance, such efforts will have limited impact. At the same time, system-level reforms must account for how people actually think and behave.
This is where insights from scholars like Elinor Ostrom become relevant. Her work on managing common resources emphasises the importance of institutions that enable cooperation, set clear rules, and build trust among users.
Professor Leong’s argument builds on this tradition, suggesting that behavioural insights can help bridge the gap between individual behaviour and institutional design. Policies are not just technical solutions; they are also social contracts shaped by shared beliefs and narratives.
“If public policies are contracts,” says Professor Leong, “then behavioural public policy reveals the implied terms. These help us interpret our social contracts and write narratives that either bind us more tightly in practices to current rules or give us the moral courage to resist and defy.”
From crisis to understanding
The stories of Singapore and Phnom Penh show that water challenges are not insurmountable. Even in the most constrained circumstances, whether shaped by geography or history, change is possible.
Across Asia, the pressures on water systems are intensifying. Urbanisation, climate change, and rising demand are pushing existing infrastructure to its limits. The need for reform is clear.
As Professor Leong says, “Water will always be essential and common, but it does not have to be dull or mysterious. Water can be a force for justice and fairness. It is the best form of welfare for the poor. It can rewrite your geopolitical destiny. Water too underrides the morality of our public life.”
If you've missed out on the lecture, you may also watch the recording here.