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Prices, property and markets in water allocation

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  • Lee, Terence R.
  • Jouravlev, Andrei

Abstract

This paper examines the means to incorporate the use of market signals through prices into water resources management with the objective of improving efficiency in the allocation of water. It reviews a vast body of recent literature on tradable resource use rights as well as actual experiences with implementing tradable water rights programmes both in Latin America and in the rest of the world. The issues discussed include the conditions required for a well-functioning water market; the potential strengths and weaknesses claimed for markets as a means of water allocation; the characteristics of the operation of a water market; types of transactions; the initial allocation of water rights; design issues, including permanent and time-limited water rights, and hydrological security and allocation rules; the limitations of markets and the factors that can adversely affect their performance, including externalities (return flow, instream and area-of-origin effects);, market power, transaction and transportation costs, and steps to mitigate them; and opportunities for expanding the role and scope of water markets.

Suggested Citation

  • Lee, Terence R. & Jouravlev, Andrei, 1998. "Prices, property and markets in water allocation," Medio Ambiente y Desarrollo 5735, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    • Handle: RePEc:ecr:col039:5735
    Note: Includes bibliography
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    File URL: http://repositorio.cepal.org/handle/11362/5735
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    Cited by:

    1. Qureshi, M. Ejaz & Shi, Tian & Qureshi, Sumaira E. & Proctor, Wendy, 2009. "Removing barriers to facilitate efficient water markets in the Murray-Darling Basin of Australia," Agricultural Water Management, Elsevier, vol. 96(11), pages 1641-1651, November.
    2. Unknown, 2003. "Water Rights Arrangements in Australia and Overseas," Commission Research Papers 31899, Productivity Commission.
    3. Svendsen, Mark & Wester, Philippus & Molle, Francois, 2005. "Managing river basins: an institutional perspective," Book Chapters,, International Water Management Institute.
    4. M Ejaz Qureshi & Tian Shi & Sumaira Qureshi & Wendy Proctor & Mac Kirby, 2009. "Removing Barriers to Facilitate Efficient Water Markets in the Murray Darling Basin – A Case Study from Australia," Socio-Economics and the Environment in Discussion (SEED) Working Paper Series 2009-02, CSIRO Sustainable Ecosystems.
    5. Gomez-Limon, Jose Antonio & Berbel, Julio & Arriaza Balmón, Manuel, 2005. "MCDM Farm System Analysis for Public Management of Irrigated Agriculture," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24676, European Association of Agricultural Economists.
    6. Wester, P. & Scott, Christopher A. & Burton, Martin, 2005. "River basin closure and institutional change in Mexico’s Lerma-Chapala Basin," Book Chapters,, International Water Management Institute.
    7. Ming-Feng Hung & Bin-Tzong Chie, 2013. "Residential Water Use: Efficiency, Affordability, and Price Elasticity," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 27(1), pages 275-291, January.
    8. Frank Jaspers, 2001. "The New Water Legislation of Zimbabwe and South Africa – Comparison of Legal and Institutional Reform," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 1(3), pages 305-325, July.
    9. J. Alarcón & L. Juana, 2016. "The Water Markets as Effective Tools of Managing Water Shortages in an Irrigation District," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 30(8), pages 2611-2625, June.
    10. Svendsen, Mark (ed.), 2005. "Irrigation and river basin management: options for governance and institutions," IWMI Books, International Water Management Institute, number 138050.
    11. Shi, Tian, 2006. "Simplifying complexity: Rationalising water entitlements in the Southern Connected River Murray System, Australia," Agricultural Water Management, Elsevier, vol. 86(3), pages 229-239, December.
    12. Molden, David & Sakthivadivel, Ramasamy & Samad, Madar & Burton, Martin, 2005. "Phases of river basin development: the need for adaptive institutions," Book Chapters,, International Water Management Institute.

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