IDEAS home Printed from https://ideas.repec.org/a/eee/agiwat/v145y2014icp5-22.html
   My bibliography  Save this article

Property rights and sustainable irrigation—A developed world perspective

Author

Listed:
  • 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.

Suggested Citation

  • 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
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0378377414002005
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.agwat.2014.07.001?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Oliver Hart & John Moore, 1999. "Foundations of Incomplete Contracts," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 66(1), pages 115-138.
    2. Easter, K William & Rosegrant, Mark W & Dinar, Ariel, 1999. "Formal and Informal Markets for Water: Institutions, Performance, and Constraints," The World Bank Research Observer, World Bank, vol. 14(1), pages 99-116, February.
    3. Elinor Ostrom, 2011. "Reflections on "Some Unsettled Problems of Irrigation"," American Economic Review, American Economic Association, vol. 101(1), pages 49-63, February.
    4. Aggarwal, Rimjhim M., 2000. "Possibilities and Limitations to Cooperation in Small Groups: The Case of Group-Owned Wells in Southern India," World Development, Elsevier, vol. 28(8), pages 1481-1497, August.
    5. Sarker, Ashutosh & Itoh, Tadao, 2001. "Design principles in long-enduring institutions of Japanese irrigation common-pool resources," Agricultural Water Management, Elsevier, vol. 48(2), pages 89-102, June.
    6. Rodney T. Smith, 1989. "Water transfers, irrigation districts, and the compensation problem," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 8(3), pages 446-465.
    7. Gary D. Libecap, 2011. "Institutional Path Dependence in Climate Adaptation: Coman's "Some Unsettled Problems of Irrigation"," American Economic Review, American Economic Association, vol. 101(1), pages 64-80, February.
    8. Meinzen-Dick, Ruth Suseela, 1996. "Groundwater markets in Pakistan: participation and productivity," Research reports 105, International Food Policy Research Institute (IFPRI).
    9. Thobani, Mateen, 1997. "Formal Water Markets: Why, When, and How to Introduce Tradable Water Rights," The World Bank Research Observer, World Bank, vol. 12(2), pages 161-179, August.
    10. R. P. Teele, 1904. "The Organization of Irrigation Companies," Journal of Political Economy, University of Chicago Press, vol. 12(2), pages 161-161.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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).
    2. Browne, Oliver R. & Ji, Xinde James, 2023. "The Economic Value of Clarifying Property Rights: Evidence from Water in Idaho’s Snake River Basin," Journal of Environmental Economics and Management, Elsevier, vol. 119(C).
    3. 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).
    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. Bajaj, Akshi & Singh, S.P. & Nayak, Diptimayee, 2022. "Impact of water markets on equity and efficiency in irrigation water use: A systematic review and meta-analysis," Agricultural Water Management, Elsevier, vol. 259(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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Molle, Francois & Berkoff, Jeremy, 2007. "Water pricing in irrigation: the lifetime of an idea," Book Chapters,, International Water Management Institute.
    2. Francesco Prota, 2002. "Water Resources And Water Policies," Working Papers 8_2002, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy.
    3. Molle, Francois & Berkoff, J., 2007. "Water pricing in irrigation: the lifetime of an idea," IWMI Books, Reports H040600, International Water Management Institute.
    4. Debaere, Peter & Li, Tianshu, 2017. "The Effects of Water Markets: Evidence from the Rio Grande," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 259187, Agricultural and Applied Economics Association.
    5. Xinde Ji & Kelly M. Cobourn, 2018. "The Economic Benefits of Irrigation Districts under Prior Appropriation Doctrine: An Econometric Analysis of Agricultural Land‐Allocation Decisions," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 66(3), pages 441-467, September.
    6. Easter, K William & Rosegrant, Mark W & Dinar, Ariel, 1999. "Formal and Informal Markets for Water: Institutions, Performance, and Constraints," The World Bank Research Observer, World Bank, vol. 14(1), pages 99-116, February.
    7. Penov, Ivan, 2004. "Institutional Options for Sustainable Irrigation: An Evidence from Bulgaria," Discussion Papers 18898, CEESA: Central and Eastern European Sustainable Agriculture International Research Project.
    8. Ji, Xinde & Cobourn, Kelly M., 2017. "Water Availability, Land Allocation, and the Role of Irrigation Districts under Prior Appropriation Doctrine," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258377, Agricultural and Applied Economics Association.
    9. 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.
    10. Cécile Hérivaux & Jean-Daniel Rinaudo & Marielle Montginoul, 2019. "Exploring the Potential of Groundwater Markets in Agriculture: Results of a Participatory Evaluation in Five French Case Studies," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 6(01), pages 1-28, September.
    11. Yi Zhou, 2016. "The Tragedy of the Anticommons in Knowledge," Review of Radical Political Economics, Union for Radical Political Economics, vol. 48(1), pages 158-175, March.
    12. Yashodha, Y., 2018. "Bargaining and Contract Choice: Evidence from Informal Groundwater Contracts," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 276035, International Association of Agricultural Economists.
    13. Richard Hornbeck & Pinar Keskin, 2011. "The Evolving Impact of the Ogallala Aquifer: Agricultural Adaptation to Groundwater and Climate," NBER Working Papers 17625, National Bureau of Economic Research, Inc.
    14. Marcelo Bianconi, 2004. "Aggregate and Idiosyncratic Risk and the Behavior of Individual Preferences under Moral Hazard," Discussion Papers Series, Department of Economics, Tufts University 0410, Department of Economics, Tufts University.
    15. Dooley, Michael P., 2000. "International financial architecture and strategic default: can financial crises be less painful?," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 53(1), pages 361-377, December.
    16. Adnan Shoaib & Muhammad Ayub Siddiqui, 2020. "Why do people participate in ROSCA saving schemes? Findings from a qualitative empirical study," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 47(2), pages 177-189, June.
    17. Schmitz, Patrick W., 2021. "On the optimality of outsourcing when vertical integration can mitigate information asymmetries," Economics Letters, Elsevier, vol. 202(C).
    18. Schmitz, Patrick W., 2012. "Public goods and the hold-up problem under asymmetric information," Economics Letters, Elsevier, vol. 117(3), pages 642-645.
    19. Patrick Francois & Joanne Roberts, 2003. "Contracting Productivity Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(1), pages 59-85.
    20. Patrick W. Schmitz, 2006. "Information Gathering, Transaction Costs, and the Property Rights Approach," American Economic Review, American Economic Association, vol. 96(1), pages 422-434, March.

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:agiwat:v:145:y:2014:i:c:p:5-22. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/agwat .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.