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Flexible Water Sharing within an International River Basin

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  • D. Kilgour
  • Ariel Dinar

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Abstract

Increasing scarcity of water resources, and greatervariability in available water supply, are causingacute difficulties for allocation agreements amongusers of water bodies. One cause of controversy,especially for river waters, is the inability of mostallocation operations to accommodate variations inconditions. In this paper we develop a flexiblemechanism that produces a Pareto-efficient allocationfor every possible flow volume in a river. Extensionsto accommodate other kinds of variation, such as waterdemand, are feasible. The mechanism is demonstratedusing historical water flow data for the Ganges, basedon stylized water demand relationships for India andBangladesh. Quantitative comparison between fixed andvariable allocation suggests that variable allocationsubstantially outperforms fixed allocation, improvingregional welfare by at least ten percent. Copyright Kluwer Academic Publishers 2001

Suggested Citation

  • D. Kilgour & Ariel Dinar, 2001. "Flexible Water Sharing within an International River Basin," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 18(1), pages 43-60, January.
  • Handle: RePEc:kap:enreec:v:18:y:2001:i:1:p:43-60
    DOI: 10.1023/A:1011100130736
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    References listed on IDEAS

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    1. Giannias, Dimitrios A. & Lekakis, Joseph N., 1997. "Policy analysis for an amicable, efficient and sustainable inter-country fresh water resource allocation," Ecological Economics, Elsevier, vol. 21(3), pages 231-242, June.
    2. Kilgour, D. Marc & Dinar, Ariel, 1995. "Are stable agreements for sharing international river waters now possible?," Policy Research Working Paper Series 1474, The World Bank.
    3. Dinar, Ariel & Wolf, Aaron, 1994. "International Markets for Water and the Potential for Regional Cooperation: Economic and Political Perspectives in the Western Middle East," Economic Development and Cultural Change, University of Chicago Press, vol. 43(1), pages 43-66, October.
    4. Barret, Scott & DEC, 1994. "Conflict and cooperation in managing international water resources," Policy Research Working Paper Series 1303, The World Bank.
    5. Booker J. F. & Young R. A., 1994. "Modeling Intrastate and Interstate Markets for Colorado River Water Resources," Journal of Environmental Economics and Management, Elsevier, vol. 26(1), pages 66-87, January.
    6. Dimitrios Giannias & Joseph Lekakis, 1996. "Fresh surface water resource allocation between Bulgaria and Greece," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 8(4), pages 473-483, December.
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