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Water Institutions And Economic Incentives To Ameliorate Market And Government Failures

  • Easter, K. William
  • Feder, Gershon

At the macro level, the way water resources are managed results in major misallocations as well as quality deterioration. It has become apparent in many cases that current practices and policies are not sustainable, and that reforms are needed. The present paper focuses on some of these reforms. It starts by reviewing and analyzing the sources of the market failures as well as government failures in water resources management. Recognizing the inevitability and desirability of some form of public action in many circumstances, it seeks to identify forms of interventions that utilize, to the extent possible, individual or private incentives by providing the institutional and legal framework in which these incentives can best complement the interventions. Examples from various countries are provided to illustrate the feasibility and merits of the proposed reforms.

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File URL: http://purl.umn.edu/14217
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Paper provided by University of Minnesota, Department of Applied Economics in its series Staff Papers with number 14217.

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Date of creation: 1996
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Handle: RePEc:ags:umaesp:14217
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  1. Easter, K. William, 1990. "Economic Failure Plagues Developing Countries' Irrigation: An Assurance Problem," Staff Papers 13337, University of Minnesota, Department of Applied Economics.
  2. 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.
  3. Kling, Catherine L. & Weinberg, Marca & Wilen, James, 1993. "Water Markets and Water Quality," Staff General Research Papers 1572, Iowa State University, Department of Economics.
  4. R. Maria Saleth & John B. Braden & J. Wayland Eheart, 1991. "Bargaining Rules for a Thin Spot Water Market," Land Economics, University of Wisconsin Press, vol. 67(3), pages 326-339.
  5. Easter, K. William & Martin, Lee R., 1977. "Water Resources Problems in Developing Countries," Bulletins 8436, University of Minnesota, Economic Development Center.
  6. Hearne, R.R. & Easter, K.W., 1995. "Water Allocation and Water Markets. An Analysis of Gains-from-Trade in Chile," Papers 315, World Bank - Technical Papers.
  7. Dinar, Ariel & Letey, J., 1991. "Agricultural water marketing, allocative efficiency, and drainage reduction," Journal of Environmental Economics and Management, Elsevier, vol. 20(3), pages 210-223, May.
  8. Meinzen-Dick, Ruth Suseela & Sullins, Martha, 1994. "Water markets in Pakistan: participation and productivity," EPTD discussion papers 4, International Food Policy Research Institute (IFPRI).
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