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Property rights and sustainable irrigation—A developed world perspective

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  • Hanemann, Michael

Abstract

This paper draws on the history of irrigation in the US West to address two sets of questions: First, did problems of collective action arise during the development of irrigation in that region? If so, were they successfully resolved? If so, how—did the solution align with Ostrom, 1993. Water Resour. Res. 29 (7), 1907–1912 design principles? Second, how sustainable was the system of water management institutions and water property rights that emerged in the US West? Has it been conducive to the efficient use of water in the West, regarded as a necessary (although not sufficient) condition for sustainability? If not, why not? It is crucial to distinguish the collective action task of building an irrigation system from that of running a system once constructed. With regard to irrigation system construction and financing, the key was not trust, as some have suggested, but capital: irrigation systems are extremely capital intensive, the capital is very long-lived, it is not modular – it cannot usefully be installed bit by bit – it is marked by major economies of scale, and it is not fungible elsewhere or in other uses. This creates massive problems of contracting, default, and bankruptcy, which in fact were a hallmark of irrigation development in the West. The failure to solve collective action in system construction contrasted with the eventual success at collectively operating an irrigation system once constructed, which was accomplished through two idiosyncratic American mechanisms—mutual water companies and special government districts. The development of irrigation in the US West left a legacy of problems with the definition and administration of property rights to water, yielding a dual system with water relatively fungible within irrigation organizations but, typically, not between them. The diversity and complexity of property rights to water was a predictable consequence of the economics and politics of water development.

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  • Hanemann, Michael, 2014. "Property rights and sustainable irrigation—A developed world perspective," Agricultural Water Management, Elsevier, vol. 145(C), pages 5-22.
    • Handle: RePEc:eee:agiwat:v:145:y:2014:i:c:p:5-22
    DOI: 10.1016/j.agwat.2014.07.001
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    Cited by:

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    3. Wang, Yahua & Wang, Huan, 2022. "Effects of farmland use rights transfer on collective action in the commons: Evidence from rural China," Land Use Policy, Elsevier, vol. 120(C).
    4. Danqiu Cao & Yahua Wang & Liangzhen Zang, 2023. "The Effects of Land Reallocation on Irrigation Collective Action: Moderating Effects of Informal Organizations and Leadership," Land, MDPI, vol. 12(7), pages 1-15, July.
    5. Anita M. Chaudhry & Dean H. K. Fairbanks & Christoph Nolte, 2024. "Water Market Participation and Agricultural Land Values," Land Economics, University of Wisconsin Press, vol. 100(1), pages 127-147.
    6. Bryan Leonard & Gary D. Libecap, 2016. "Collective Action by Contract: Prior Appropriation and the Development of Irrigation in the Western United States," NBER Working Papers 22185, National Bureau of Economic Research, Inc.
    7. Su, Yiqing & Araral, Eduardo & Wang, Yahua, 2020. "The effects of farmland use rights trading and labor outmigration on the governance of the irrigation commons: Evidence from China," Land Use Policy, Elsevier, vol. 91(C).
    8. Zang, Liangzhen & Araral, Eduardo & Wang, Yahua, 2019. "Effects of land fragmentation on the governance of the commons: Theory and evidence from 284 villages and 17 provinces in China," Land Use Policy, Elsevier, vol. 82(C), pages 518-527.

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    More about this item

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

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