IDEAS home Printed from https://ideas.repec.org/a/wly/apecpp/v43y2021i4p1571-1594.html
   My bibliography  Save this article

The Economics of Groundwater Governance Institutions across the Globe

Author

Listed:
  • Eric C. Edwards
  • Todd Guilfoos

Abstract

This article provides an economic framework for understanding the emergence and purpose of groundwater governance across the globe. We examine ten basins located on six continents via an integrated assessment along three dimensions: characteristics of the groundwater resource; externality problems; and governance institutions. Groundwater governance addresses local externalities to balance the benefits of reducing common pool losses with the costs of doing so. While broad, basin‐wide solutions to open access pumping are limited, spatially localized externality problems raise the benefits of management actions, allowing for the implementation of more stringent pumping controls in certain areas.

Suggested Citation

  • Eric C. Edwards & Todd Guilfoos, 2021. "The Economics of Groundwater Governance Institutions across the Globe," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 43(4), pages 1571-1594, December.
    • Handle: RePEc:wly:apecpp:v:43:y:2021:i:4:p:1571-1594
    DOI: 10.1002/aepp.13088
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/aepp.13088
    Download Restriction: no
    File URL: https://libkey.io/10.1002/aepp.13088?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Tom Gleeson & Yoshihide Wada & Marc F. P. Bierkens & Ludovicus P. H. van Beek, 2012. "Water balance of global aquifers revealed by groundwater footprint," Nature, Nature, vol. 488(7410), pages 197-200, August.
    2. Zekri, Slim, 2008. "Using economic incentives and regulations to reduce seawater intrusion in the Batinah coastal area of Oman," Agricultural Water Management, Elsevier, vol. 95(3), pages 243-252, March.
    3. Ifft, Jennifer & Bigelow, Daniel P. & Savage, Jeffrey, 2018. "The Impact of Irrigation Restrictions on Cropland Values in Nebraska," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 43(2), May.
    4. C.-Y. Cynthia Lin Lawell, 2016. "The Management of Groundwater: Irrigation Efficiency, Policy, Institutions, and Externalities," Annual Review of Resource Economics, Annual Reviews, vol. 8(1), pages 247-259, October.
    5. Hang Zheng & Zhongjing Wang & Siyi Hu & Yongping Wei, 2012. "A Comparative Study of the Performance of Public Water Rights Allocation in China," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 26(5), pages 1107-1123, March.
    6. Jie Chen & Hao Wu & Hui Qian & Xinyan Li, 2018. "Challenges and prospects of sustainable groundwater management in an agricultural plain along the Silk Road Economic Belt, north-west China," International Journal of Water Resources Development, Taylor & Francis Journals, vol. 34(3), pages 354-368, May.
    7. Peterson, Jeffrey M. & Saak, Alexander E., 2013. "Spatial externalities in aquifers with varying thickness: Theory and numerical results for the Ogallala aquifer," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150553, Agricultural and Applied Economics Association.
    8. Liu, Zhuo & Suter, Jordan F. & Messer, Kent D. & Duke, Joshua M. & Michael, Holly A., 2014. "Strategic entry and externalities in groundwater resources: Evidence from the lab," Resource and Energy Economics, Elsevier, vol. 38(C), pages 181-197.
    9. Ayres, Andrew B. & Edwards, Eric C. & Libecap, Gary D., 2018. "How transaction costs obstruct collective action: The case of California's groundwater," Journal of Environmental Economics and Management, Elsevier, vol. 91(C), pages 46-65.
    10. R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837-877.
    11. Esteban, Encarna & Albiac, José, 2011. "Groundwater and ecosystems damages: Questioning the Gisser-Sánchez effect," Ecological Economics, Elsevier, vol. 70(11), pages 2062-2069, September.
    12. Ostrom, Elinor & Walker, James & Gardner, Roy, 1992. "Covenants with and without a Sword: Self-Governance Is Possible," American Political Science Review, Cambridge University Press, vol. 86(2), pages 404-417, June.
    13. Allen, Douglas W., 2011. "The Institutional Revolution," University of Chicago Press Economics Books, University of Chicago Press, number 9780226014746, September.
    14. Oliver E. Williamson, 2000. "The New Institutional Economics: Taking Stock, Looking Ahead," Journal of Economic Literature, American Economic Association, vol. 38(3), pages 595-613, September.
    15. Burness, H. Stuart & Brill, Thomas C., 2001. "The role for policy in common pool groundwater use," Resource and Energy Economics, Elsevier, vol. 23(1), pages 19-40, January.
    16. Koundouri, Phoebe & Roseta-Palma, Catarina & Englezos, Nikolaos, 2017. "Out of Sight, Not Out of Mind: Developments in Economic Models of Groundwater Management," International Review of Environmental and Resource Economics, now publishers, vol. 11(1), pages 55-96, October.
    17. Menegaki, Angeliki N. & Mellon, Robert C. & Vrentzou, Anna & Koumakis, George & Tsagarakis, Konstantinos P., 2009. "What's in a name: Framing treated wastewater as recycled water increases willingness to use and willingness to pay," Journal of Economic Psychology, Elsevier, vol. 30(3), pages 285-292, June.
    18. David Blakeslee & Ram Fishman & Veena Srinivasan, 2020. "Way Down in the Hole: Adaptation to Long-Term Water Loss in Rural India," American Economic Review, American Economic Association, vol. 110(1), pages 200-224, January.
    19. Manning, Dale T. & Suter, Jordan, 2016. "Well Capacity and the Gains from Coordination in a Spatially Explicit Aquifer," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236206, Agricultural and Applied Economics Association.
    20. Edwards, Eric C. & Cristi, Oscar & Edwards, Gonzalo & Libecap, Gary D., 2018. "An illiquid market in the desert: estimating the cost of water trade restrictions in northern Chile," Environment and Development Economics, Cambridge University Press, vol. 23(6), pages 615-634, December.
    21. Walker, James M & Gardner, Roy, 1992. "Probabilistic Destruction of Common-Pool Resources: Experimental Evidence," Economic Journal, Royal Economic Society, vol. 102(414), pages 1149-1161, September.
    22. Pfeiffer, Lisa & Lin, C.-Y. Cynthia, 2012. "Groundwater pumping and spatial externalities in agriculture," Journal of Environmental Economics and Management, Elsevier, vol. 64(1), pages 16-30.
    23. Giordano, Mark & Villholth, Karen, 2007. "The agricultural groundwater revolution: opportunities and threats to development," IWMI Books, Reports H040039, International Water Management Institute.
    24. Steven M. Smith & Krister Andersson & Kelsey C. Cody & Michael Cox & Darren Ficklin, 2017. "Responding to a Groundwater Crisis: The Effects of Self-Imposed Economic Incentives," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 4(4), pages 985-1023.
    25. Huang, Qiuqiong & Rozelle, Scott & Lohmar, Bryan & Huang, Jikun & Wang, Jinxia, 2006. "Irrigation, agricultural performance and poverty reduction in China," Food Policy, Elsevier, vol. 31(1), pages 30-52, February.
    26. Bill Provencher & Oscar Burt, 1994. "A Private Property Rights Regime for the Commons: The Case for Groundwater," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(4), pages 875-888.
    27. Saak, Alexander E. & Peterson, Jeffrey M., 2007. "Groundwater use under incomplete information," Journal of Environmental Economics and Management, Elsevier, vol. 54(2), pages 214-228, September.
    28. Nathaniel H Merrill & Todd Guilfoos, 2018. "Optimal Groundwater Extraction under Uncertainty and a Spatial Stock Externality," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 100(1), pages 220-238.
    29. Drysdale, Krystal M. & Hendricks, Nathan P., 2018. "Adaptation to an irrigation water restriction imposed through local governance," Journal of Environmental Economics and Management, Elsevier, vol. 91(C), pages 150-165.
    30. Chris Brozyna & Todd Guilfoos & Stephen Atlas, 2018. "Slow and deliberate cooperation in the commons," Nature Sustainability, Nature, vol. 1(4), pages 184-189, April.
    31. Brozovic, Nicholas & Sunding, David L. & Zilberman, David, 2010. "On the spatial nature of the groundwater pumping externality," Resource and Energy Economics, Elsevier, vol. 32(2), pages 154-164, April.
    32. Unesco Unesco, 2015. "Water for a Sustainable World," Working Papers id:6657, eSocialSciences.
    33. Eric C. Edwards, 2016. "What Lies Beneath? Aquifer Heterogeneity and the Economics of Groundwater Management," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 3(2), pages 453-491.
    34. Jordan F. Suter & Joshua M. Duke & Kent D. Messer & Holly A. Michael, 2012. "Behavior in a Spatially Explicit Groundwater Resource: Evidence from the Lab," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(5), pages 1094-1112.
    35. Closas, Alvar & Molle, François & Hernández-Mora, Nuria, 2017. "Sticks and carrots to manage groundwater over-abstraction in La Mancha, Spain," Agricultural Water Management, Elsevier, vol. 194(C), pages 113-124.
    36. Shawn J. McCoy & Xiaoxi Zhao, 2018. "A City under Water: A Geospatial Analysis of Storm Damage, Changing Risk Perceptions, and Investment in Residential Housing," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 5(2), pages 301-330.
    37. Omar K.M. Ouda, 2014. "Impacts of agricultural policy on irrigation water demand: a case study of Saudi Arabia," International Journal of Water Resources Development, Taylor & Francis Journals, vol. 30(2), pages 282-292, June.
    38. Schlager, E., 2007. "Community management of groundwater," IWMI Books, Reports H040045, International Water Management Institute.
    39. Kuwayama, Yusuke & Brozović, Nicholas, 2013. "The regulation of a spatially heterogeneous externality: Tradable groundwater permits to protect streams," Journal of Environmental Economics and Management, Elsevier, vol. 66(2), pages 364-382.
    40. Guilfoos, Todd & Pape, Andreas D. & Khanna, Neha & Salvage, Karen, 2013. "Groundwater management: The effect of water flows on welfare gains," Ecological Economics, Elsevier, vol. 95(C), pages 31-40.
    41. Bertone Oehninger, Ernst & Lin Lawell, C.-Y. Cynthia, 2021. "Property rights and groundwater management in the High Plains Aquifer," Resource and Energy Economics, Elsevier, vol. 63(C).
    42. Jordan Tong & Daniel Feiler, 2017. "A Behavioral Model of Forecasting: Naive Statistics on Mental Samples," Management Science, INFORMS, vol. 63(11), pages 3609-3627, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ekaterina Golovina & Vera Khloponina & Pavel Tsiglianu & Runchu Zhu, 2023. "Organizational, Economic and Regulatory Aspects of Groundwater Resources Extraction by Individuals (Case of the Russian Federation)," Resources, MDPI, vol. 12(8), pages 1-16, July.
    2. Athanasios Tsiarapas & Zisis Mallios, 2023. "Estimating the long-term impact of market power on the welfare gains from groundwater markets," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 25(3), pages 377-406, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ayres, Andrew B. & Edwards, Eric C. & Libecap, Gary D., 2018. "How transaction costs obstruct collective action: The case of California's groundwater," Journal of Environmental Economics and Management, Elsevier, vol. 91(C), pages 46-65.
    2. Louis Sears & David Lim & C.-Y. Cynthia Lin Lawell, 2018. "The Economics of Agricultural Groundwater Management Institutions: The Case of California," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 4(03), pages 1-21, July.
    3. Sayre, Susan Stratton & Taraz, Vis, 2019. "Groundwater depletion in India: Social losses from costly well deepening," Journal of Environmental Economics and Management, Elsevier, vol. 93(C), pages 85-100.
    4. Rouhi Rad, Mani & Brozović, Nicholas & Foster, Timothy & Mieno, Taro, 2020. "Effects of instantaneous groundwater availability on irrigated agriculture and implications for aquifer management," Resource and Energy Economics, Elsevier, vol. 59(C).
    5. Ellen M. Bruno & Nick Hagerty & Arthur R. Wardle, 2022. "The Political Economy of Groundwater Management: Descriptive Evidence from California," NBER Chapters, in: American Agriculture, Water Resources, and Climate Change, pages 343-365, National Bureau of Economic Research, Inc.
    6. Dietrich Earnhart & Nathan P. Hendricks, 2023. "Adapting to water restrictions: Intensive versus extensive adaptation over time differentiated by water right seniority," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(5), pages 1458-1490, October.
    7. Quintana Ashwell, Nicolas E. & Peterson, Jeffrey M. & Hendricks, Nathan P., 2018. "Optimal groundwater management under climate change and technical progress," Resource and Energy Economics, Elsevier, vol. 51(C), pages 67-83.
    8. Godwin Kwabla Ekpe & Anna A. Klis, 2023. "Spillover Effects in Irrigated Agriculture from the Groundwater Commons," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 86(3), pages 469-507, November.
    9. Ellen M. Bruno & Richard J. Sexton, 2020. "The Gains from Agricultural Groundwater Trade and the Potential for Market Power: Theory and Application," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(3), pages 884-910, May.
    10. Eric C. Edwards, 2016. "What Lies Beneath? Aquifer Heterogeneity and the Economics of Groundwater Management," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 3(2), pages 453-491.
    11. Reinelt, Peter, 2020. "Spatial-dynamic seawater intrusion and pumping cost externalities in a confined aquifer," Resource and Energy Economics, Elsevier, vol. 59(C).
    12. Andrew B. Ayres & Eric C. Edwards & Gary D. Libecap, 2017. "How Transaction Costs Obstruct Collective Action: Evidence from California’s Groundwater," NBER Working Papers 23382, National Bureau of Economic Research, Inc.
    13. Manning, Dale T. & Rad, Mani Rouhi & Suter, Jordan F. & Goemans, Christopher & Xiang, Zaichen & Bailey, Ryan, 2020. "Non-market valuation in integrated assessment modeling: The benefits of water right retirement," Journal of Environmental Economics and Management, Elsevier, vol. 103(C).
    14. Louis Sears & David Lim & C.-Y. Cynthia Lin Lawell, 2019. "Spatial Groundwater Management: A Dynamic Game Framework and Application to California," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 5(01), pages 1-34, January.
    15. Drysdale, Krystal M. & Hendricks, Nathan P., 2018. "Adaptation to an irrigation water restriction imposed through local governance," Journal of Environmental Economics and Management, Elsevier, vol. 91(C), pages 150-165.
    16. Stahn, Hubert & Tomini, Agnes, 2021. "Externality and common-pool resources: The case of artesian aquifers," Journal of Environmental Economics and Management, Elsevier, vol. 109(C).
    17. Smith, Steven M., 2018. "Economic incentives and conservation: Crowding-in social norms in a groundwater commons," Journal of Environmental Economics and Management, Elsevier, vol. 90(C), pages 147-174.
    18. Pfeiffer, Lisa & Lin, C.-Y. Cynthia, 2012. "Groundwater pumping and spatial externalities in agriculture," Journal of Environmental Economics and Management, Elsevier, vol. 64(1), pages 16-30.
    19. Guilfoos, Todd & Pape, Andreas D. & Khanna, Neha & Salvage, Karen, 2013. "Groundwater management: The effect of water flows on welfare gains," Ecological Economics, Elsevier, vol. 95(C), pages 31-40.
    20. Collie, Samuel, 2015. "Accounting for well capacity in the economic decision making of groundwater users," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205783, Agricultural and Applied Economics Association.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:apecpp:v:43:y:2021:i:4:p:1571-1594. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1002/(ISSN)2040-5804 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.