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Historical regulation of Victoria's water sector: A case of government failure?

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Abstract

This paper analyses the role of government failure in Victoria's water sector between 1905 and 1984 as evidenced in the rise of in-stream salinity. It will be shown that high levels of salinity can, in part, be attributed to regulatory failure for two reasons. First, the method of water allocation, a compulsory minimum charge with the marginal cost of water being zero, encouraged over watering, resulting in increased water tables via groundwater recharge. Second, the government did not provide adequate finance for construction of appropriate removal of saline drainage water, and thereby allowed increasing in-stream salinity. Copyright 2007 The Author Journal compilation 2007 Australian Agricultural and Resource Economics Society inc. and Blackwell Publishers Ltd .

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  • E. Harris, 2007. "Historical regulation of Victoria's water sector: A case of government failure? ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 51(3), pages 343-352, September.
    • Handle: RePEc:bla:ajarec:v:51:y:2007:i:3:p:343-352
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    File URL: http://hdl.handle.net/10.1111/j.1467-8489.2007.00384.x
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    1. George J. Stigler, 1971. "The Theory of Economic Regulation," Bell Journal of Economics, The RAND Corporation, vol. 2(1), pages 3-21, Spring.
    2. Anthony Downs, 1957. "An Economic Theory of Political Action in a Democracy," Journal of Political Economy, University of Chicago Press, vol. 65(2), pages 135-135.
    3. Pannell, David J., 2001. "Dryland salinity: economic, scientific, social and policy dimensions," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 45(4), pages 1-30.
    4. Peter Boettke & Christopher Coyne & Peter Leeson & Frederic Sautet, 2005. "The New Comparative Political Economy," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 18(3), pages 281-304, December.
    5. George J. Stigler, 1974. "Free Riders and Collective Action: An Appendix to Theories of Economic Regulation," Bell Journal of Economics, The RAND Corporation, vol. 5(2), pages 359-365, Autumn.
    6. Ikeda, Sanford, 2003. "How Compatible Are Public Choice and Austrian Political Economy?," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 16(1), pages 63-75, March.
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    8. Pannell, David J. & McFarlane, Donald J. & Ferdowsian, Ruhi, 2001. "Rethinking the externality issue for dryland salinity in Western Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 45(3), pages 1-17.
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    Cited by:

    1. Edwyna Harris, 2011. "The Impact of Institutional Path Dependence on Water Market Efficiency in Victoria, Australia," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 25(15), pages 4069-4080, December.
    2. Jason Hackworth, 2009. "Normalizing ‘Solutions’ to ‘Government Failure’: Media Representations of Habitat for Humanity," Environment and Planning A, , vol. 41(11), pages 2686-2705, November.
    3. Pim Derwort & Nicolas Jager & Jens Newig, 2019. "Towards productive functions? A systematic review of institutional failure, its causes and consequences," Policy Sciences, Springer;Society of Policy Sciences, vol. 52(2), pages 281-298, June.

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