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Regulation versus pricing in urban water policy: the case of the Australian National Water Initiative

  • Byrnes, Joel
  • Crase, Lin
  • Dollery, Brian

The Australian National Water Initiative (NWI) builds on the foundations of earlier water reforms, attempts to correct earlier errors in both policy and its implementation, and seeks to better define some of the policy aims with the benefit of hindsight. However, despite the deliberate effort to improve on earlier reforms, the NWI still embodies a significant economic paradox. Although policymakers have shown their faith in the market insofar as allocating water between competing agricultural interests is concerned, they have not shown the same degree of faith in the ability of urban users to respond to price signals. This paper attempts to shed at least some light on this question by examining the responses of a number of State governments across Australia to the NWI. The paper specifically explores the rationale for non-price regulation in the urban context but challenges the long-term viability of this approach.

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File URL: http://purl.umn.edu/116964
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Article provided by Australian Agricultural and Resource Economics Society in its journal Australian Journal of Agricultural and Resource Economics.

Volume (Year): 50 (2006)
Issue (Month): 3 (September)
Pages:

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Handle: RePEc:ags:aareaj:116964
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  1. Mary E. Renwick & Sandra O. Archibald, 1998. "Demand Side Management Policies for Residential Water Use: Who Bears the Conservation Burden?," Land Economics, University of Wisconsin Press, vol. 74(3), pages 343-359.
  2. M. L. Weitzman, 1973. "Prices vs. Quantities," Working papers 106, Massachusetts Institute of Technology (MIT), Department of Economics.
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