increased significantly throughout the Decade, it has retained a comparatively small proportion (4 par cent) of total external sector funding for urban and rural water supply. However ,government commitment to such projects has been reflected by an almost sixfold increase in th8 number being implementecl since the start of the Decade. 48. Since financial resources for the sector are extremely limited in most countries, and because radical shifts in sector allocations are unlikely in the foreseeable future, the conclusion is increasingly being reached that project beneficiaries should participate in cost recovery if service coverage in developing countries is to be extended. However, it is becoming apparent that the difficulties in levying charges and collecting payments for water and sanitation systems are frequently related to weak institutional systems and a failure to meet the users’ perceived needs. 49. The second half of the Decade has experienced a growing international interest in innovative approaches to cost recovery. Issues of project financing, cost al location, credit arrangements and user involvement in system development are receiving widespread attention. Specific cost containment and manageme:k activities, such as the reduction of unaccounted-for water, the establishment of revolving funds for system financing, the provision of special low interest credits and of local bank guarantees, the setting of water rates acceptable to the users and the consideration of cross-subsidisation of user groups and systems as a means of expanding coverage while maintaining affordable water tariffs have been encouraged. Issues related to levels of demand are increasingly being studied in terms of the willingness of users to pay for water and sanitation services. One consequence of greater decision-making on the part of the community is the possibility that the community itself might devise locally acceptable methods of recovering the costs of its water and sanitation system.
**Analysis**
The text appears to be discussing the challenges and strategies for providing water and sanitation services in developing countries. It highlights the limited financial resources available for this sector and the need for innovative approaches to cost recovery, such as user involvement and local financing mechanisms. The text also touches on the importance of understanding user willingness to pay for these services. Given these themes, it is likely that the text is related to economic development and the provision of basic services in developing countries.

**Category**
Economic development, Health