This paper provides novel evidence on the mechanisms driving the combination of poor-quality public services and high prevalence of non-payment (free riding) in low- and middle-income countries. We implement a field experiment in the slums of two major Indian cities and in the context of a fee-funded public service provided by community toilets. Collecting original surveys, behavioural and objective measurements, we show that an exogenous boost in the maintenance quality of the service improves delivery and reduces free riding in a static and dynamic way, but excludes a share of residents from using the service. Providers react strategically to external rewards by shifting their efforts towards monitoring activities. Excluded users are forced to dispose human waste in common-property, generating large health externalities. Residents demand more public intervention in the service provision.