Embedding Economic Drivers in Participative Water Management

Country location influences the institutional surroundings of the infrastructures related to water systems. In the Netherlands, water management has its own particularities. Temporarily inflow of affluent water from the rivers or the sea resulted in a highly developed institutional setting based on flood risk prevention. From an economic perspective, managing water is about allocating and using water in an effective and efficient way. This article deals with the coordination problem related to multi functionality of water systems. 'Allocation efficiency' is the issue. The diversity of water systems such as rivers, lakes, ditches or groundwater is multifunctional and within the systems, demand is competing. Decision makers should be aware of the different aspects of infrastructures that interfere with water systems. Further on in the decision-making, these aspects need to be valued. This may be done explicitly (for example in a formal cost-benefit analysis) or implicitly. Implicit valuation takes place when the outcome of a choice is expressed without an explicit weight and value of the effects a project has. The focus of this article is on economic drivers that express values to decision makers and thereby may stimulate the implementation of planned water projects. The problem addressed here is how these economic drivers may be institutionalized and what institutional (re-)designs are necessary to organize the coordination problem related to the multi functionality of water systems. It is part of participative water management that, under the name of Joint Planning Approach (JPA), is developed during the 'Freude am Fluss' international project that aims at formulating and realizing adaptation strategies in water management, specifically the realization of more space for rivers.