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Water Markets And Decentralized Water Resources Management

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  • Easter, K. William
  • Hearne, Robert R.

Abstract

Because of its importance and the perceived inability of private sector sources to meet water demands, many countries have depended on the public sector to provide water services for their populations. Yet this has resulted in many inefficient public water projects and in inadequate supplies of good quality and reliable water. Decentralization of water management, including the use of water markets, cannot solve all of the water problems, but it can improve the efficiency of water allocation. When given adequate responsibility and authority, water user associations have effectively taken over water management activities at a savings to tax payers. Moreover, water markets add the potential benefit of improving water efficiency within the sector as well as providing a mechanism for reallocating water among sectors. The key question involves developing innovative mechanisms for reducing the transaction costs of organizing water users and of making water trades. Water rights need to be established which are recorded, tradeable, enforceable, and separate from land if markets are to operate effectively. Also, institutions are needed that effectively resolve conflicts over water rights, including third party impacts and water quality concerns.

Suggested Citation

  • Easter, K. William & Hearne, Robert R., 1994. "Water Markets And Decentralized Water Resources Management," Staff Papers 13864, University of Minnesota, Department of Applied Economics.
    • Handle: RePEc:ags:umaesp:13864
    DOI: 10.22004/ag.econ.13864
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    File URL: https://ageconsearch.umn.edu/record/13864/files/p94-24.pdf
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    References listed on IDEAS

    as
    1. Bonnie G. Colby, 1990. "Transactions Costs and Efficiency in Western Water Allocation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(5), pages 1184-1192.
    2. Alberta H. Charney & Gary C. Woodard, 1990. "Socioeconomic Impacts of Water Farming on Rural Areas of Origin in Arizona," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(5), pages 1193-1199.
    3. Palanisami, K. & Easter, K. William, 1991. "Hydro-Economic Interaction between Tank Storage and Groundwater Recharge," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 46(2), April.
    4. Easter, K. William, 1990. "Economic Failure Plagues Developing Countries' Irrigation: An Assurance Problem," Staff Papers 13337, University of Minnesota, Department of Applied Economics.
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    Citations

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    Cited by:

    1. Hearne, Robert R. & Trava, Jose L., 1997. "Water Markets in Mexico: Opportunities and Constraints," Discussion Papers 24145, International Institute for Environment and Development, Environmental Economics Programme.
    2. Easter, K. William, 1996. "MARKET APPROACHES TO WATER ALLOCATION: WHAT HAVE WE LEARNED?; Proceedings of the Fifth Joint Conference on Agriculture, Food, and the Environment, June 17-18, 1996, Padova, Italy," Working Papers 14428, University of Minnesota, Center for International Food and Agricultural Policy.
    3. Thomas M Fullerton Jr, 2004. "Recent Trends in Border Economics," Urban/Regional 0405005, University Library of Munich, Germany.

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