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The Impact of Institutional Path Dependence on Water Market Efficiency in Victoria, Australia

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  • Edwyna Harris

Abstract

Water governance in Australia’s irrigation sector has undergone substantial change over the last three decades. In part, this change has been the result of a shift in intellectual thinking regarding the pricing and allocation of irrigation water with a move away from primary reliance on government to undertake these activities and a greater dependence on markets. Institutional change will be impacted on by the existence of institutional path dependence created by previous frameworks. Path dependence arises because actors are unable to predict the exact outcome of decisions made at different junctures in time. Individual decisions may be temporally remote but will impact the subsequent path of change as a result of lock-in. In turn, institutional path dependence may create some rigidity within new institutional arrangements. Evidence of current trading restrictions on Victorian water markets illustrates this outcome. These restrictions may not be permanent, but in the short-run they have limited, to some extent, the gains accruing from water trading. Copyright Springer Science+Business Media B.V. 2011

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  • Edwyna Harris, 2011. "The Impact of Institutional Path Dependence on Water Market Efficiency in Victoria, Australia," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 25(15), pages 4069-4080, December.
    • Handle: RePEc:spr:waterr:v:25:y:2011:i:15:p:4069-4080
    DOI: 10.1007/s11269-011-9884-0
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    4. R. Quentin Grafton & James Horne & Sarah Ann Wheeler, 2016. "On the Marketisation of Water: Evidence from the Murray-Darling Basin, Australia," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 30(3), pages 913-926, February.
    5. Djanibekov, Nodir & Sommer, Rolf & Djanibekov, Utkur, 2013. "Evaluation of effects of cotton policy changes on land and water use in Uzbekistan: Application of a bio-economic farm model at the level of a water users association," Agricultural Systems, Elsevier, vol. 118(C), pages 1-13.
    6. Ching Leong & Raul Lejano, 2016. "Thick narratives and the persistence of institutions: using the Q methodology to analyse IWRM reforms around the Yellow River," Policy Sciences, Springer;Society of Policy Sciences, vol. 49(4), pages 445-465, December.
    7. Brooks, Robert & Harris, Edwyna, 2014. "Price leadership and information transmission in Australian water allocation markets," Agricultural Water Management, Elsevier, vol. 145(C), pages 83-91.
    8. Nadine Wittmann, 2014. "A Microeconomic Perspective on Water Resources Management: Analyzing the Effects on Optimal Land Rents Along a River Basin," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 28(5), pages 1309-1325, March.
    9. J. Kirby & Md. Mainuddin & M. Ahmad & L. Gao, 2013. "Simplified Monthly Hydrology and Irrigation Water Use Model to Explore Sustainable Water Management Options in the Murray-Darling Basin," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 27(11), pages 4083-4097, September.
    10. Eduardo Araral & Yahua Wang, 2013. "Water Governance 2.0: A Review and Second Generation Research Agenda," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 27(11), pages 3945-3957, September.

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