The free market works well generally, why not here? To try to reverse generations of social tradition where only "lower" people are involved with waste, the gov

The free market works well generally, why not here? To try to reverse generations of social tradition where only "lower" people are involved with waste, the govt. should really pay high rates for waste, which would work to reverse this tradition by elevating the social status of the workers involved. You miss the point in any case. By paying for waste delivered (and perhaps tokens to minimize fraud), you would create a cottage industry of portable toilets, and solve the problem with one simple policy. Another incentive based strategy would be to make cash bonuses to local officials based on the fraction of residents in their district actually used toilets. This could be measured by randomized surveys and spot checks. All problems can be improved with properly designed financial incentives.