Water is often not confined within territorial boundaries so conflicts may arise about shared water resources. When such boundaries lie within a federal state, conflicts may be peacefully and efficiently resolved under law, and if the state fail to reach an agreement, the federal government may impose one. Similar international conflicts are more difficult to resolve because no third party has the authority to enforce an agreement among national states, let alone impose one. Such international agreements must be self-enforcing. Efficient outcomes may emerge, but are not guaranteed. International law may emphasize the doctrine of"equitable utilization"of water resources, but there is no clear definition of what this implies. In the Colorado River case, the polluter (the United States) agreed to pay for all the costs of providing the downstream neighbor (Mexico) with clean water. In the Rhine River case, the downstream country (the Netherlands) agreed to pay part - but not all - of the costs of cleanup. In Colombia River Treaty case, both parties agreed to incur construction costs on their side of the border and share evenly the gross (not the net) benefit. This division may well have yielded a smaller net benefit to the United States than unilateral development would have, but the United States ratified the treaty. Negotiated outcomes need not to maximize net benefits for all countries. To some extent, inefficiencies can be traced to the desire to nationalize resources rather than to gain from cooperative development. The Indus Waters Treaty, for example, divided the Indus and its tributaries between India and Pakistan, rather than exploit joint use and development of the basin. Both efficiency and equity should be considered in agreements for managing international water resources. The 1959 Nile Waters Agreement between Egypt and Sudan did not reserve water for upstream riparians - notably, Ethiopia. A basinwide approach could make use of Nile waters more efficient and benefit all three riparians: Egypt, Ethiopia, and Sudan. Construction of dams in Ethiopia would give that country irrigation, would eliminate the annual Nile flood, and would increase the total water available to Ethiopia and Sudan. In negotiations over use of the Nile, the net benefits of basinwide management, and the ways these three riparians could share equitably in gains, should be demonstrated. In the 1980s, Egypt did not run short of water because Sudan did not take its full allocation and because Ethiopia did not withdraw any water from the basin. Increased water demand will inevitably create tension between the states.
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