Social Contracts, Markets And Efficiency -- Groundwater Irrigation In North India
AbstractThis paper uses primary data to analyze the institutions and informal markets that govern groundwater allocation in the principal sugarcane belt of North India. In contrast to earlier literature, we find that the observed water trades result in efficient water allocation across farms. We interpret this and other stylized facts in terms of a simple bargaining model with limited inter-player transfers. Poor functioning of the power sector leads to reduced pumping and a water supply constraint. Simulations show that power supply reform can significantly increase farm yields, be financed out of the increased farm profits, and provide an instrument to use for attaining intertemporal efficiency in water allocation.
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Bibliographic InfoPaper provided by Centre for Development Economics, Delhi School of Economics in its series Working papers with number 183.
Length: 39 pages
Date of creation: Apr 2010
Date of revision:
Other versions of this item:
- Banerji, A. & Meenakshi, J.V. & Khanna, Gauri, 2012. "Social contracts, markets and efficiency: Groundwater irrigation in North India," Journal of Development Economics, Elsevier, vol. 98(2), pages 228-237.
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
- Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture
- Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
This paper has been announced in the following NEP Reports:
- NEP-AGR-2010-05-02 (Agricultural Economics)
- NEP-ALL-2010-05-02 (All new papers)
- NEP-CWA-2010-05-02 (Central & Western Asia)
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