Irrigation Costs and Prices: An Institutional Economic Analysis of Pricing Strategies in the Office Du Niger and Small Pump-Irrigated Village Perimeters in Mali

This paper explores the link between cost and price in two irrigation schemes in Mali - the Office du Niger (ON), a large-scale gravity irrigation authority, and a number of small pump-irrigated fields at village perimeters along the Niger River (Petits Perimetres d'Irrigation Villagois). I argue that the effectiveness of cost-recovery pricing strategies for improving the long-run financial sustainability of irrigation systems and advancing national development objectives is a function of decision-making processes, which influence the distribution and absolute levels of cost and benefit flows. Participants' willingness and capacity to invest in problem solving play an important part in irrigation system viability by increasing the rate of technological and institutional change, which can increase benefits and decrease costs of production. Understanding formal and informal relationships between service users and service providers can help reveal institution-based sources of incentives and disincentives for parties to invest in producing effort and solving problems. The paper examines the price strategies in two case studies and the relationships among stakeholders in the design and implementation of each system's price strategies. Institutional theory suggests ways to align individual incentives with the objectives of the pricing strategy; targeted investments may be needed to provide participants with the means to act on institutionally designed incentives.