IDEAS home Printed from https://ideas.repec.org/p/foi/wpaper/2011_3.html
   My bibliography  Save this paper

Regulating groundwater use in developing countries: a feasible instrument for public intervention

Author

Listed:
  • Lars Gårn Hansen

    () (Institute of Food and Resource Economics, University of Copenhagen)

  • Frank Jensen

    () (Institute of Food and Resource Economics, University of Copenhagen)

  • Eirik S. Amundsen

    () (Institute of Food and Resource Economics, University of Copenhagen)

Abstract

In many developing countries, groundwater is a common pool resource which is potentially subject to the tragedy of the commons if water extraction is not adequately regulated. However, in these countries, the regulatory infrastructure is often too weak to allow detailed monitoring of individual groundwater extraction. For this reason, classical public intervention instruments, such as consumption fees or tradable quotas, are infeasible. Here we present a theoretical foundation for a new public regulatory instrument that can potentially generate the same efficiency inducing incentives as fees and tradable quotas, but without their information and monitoring requirements. The instrument we propose is a tax based on aggregate extraction, rather than individual extraction measures.

Suggested Citation

  • Lars Gårn Hansen & Frank Jensen & Eirik S. Amundsen, 2011. "Regulating groundwater use in developing countries: a feasible instrument for public intervention," IFRO Working Paper 2011/3, University of Copenhagen, Department of Food and Resource Economics.
  • Handle: RePEc:foi:wpaper:2011_3
    as

    Download full text from publisher

    File URL: http://okonomi.foi.dk/workingpapers/WPpdf/WP2011/WP_2011_3_regulating_groundwater_use.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Neher,Philip A., 1990. "Natural Resource Economics," Cambridge Books, Cambridge University Press, number 9780521311748, December.
    2. Burness, H Stuart & Quirk, James P, 1979. "Appropriative Water Rights and the Efficient Allocation of Resources," American Economic Review, American Economic Association, pages 25-37.
    3. Ambec, Stefan & Sprumont, Yves, 2002. "Sharing a River," Journal of Economic Theory, Elsevier, pages 453-462.
    4. Xepapadeas, A. P., 1991. "Environmental policy under imperfect information: Incentives and moral hazard," Journal of Environmental Economics and Management, Elsevier, vol. 20(2), pages 113-126, March.
    5. Tobias, Justin & Zellner, Arnold, 2000. "A Note on Aggregation, Disaggregation and Forecasting Performance," Staff General Research Papers Archive 12024, Iowa State University, Department of Economics.
    6. Lars Hansen, 1998. "A Damage Based Tax Mechanism for Regulation of Non-Point Emissions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, pages 99-112.
    7. Urs Steiner Brandt & Niels Vestergaard, 2006. "Illegal Landings: An Aggregate Catch Self-Reporting Mechanism," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(4), pages 974-985.
    8. Hellegers, Petra & Zilberman, David & van Ierland, Ekko, 2001. "Dynamics of agricultural groundwater extraction," Ecological Economics, Elsevier, vol. 37(2), pages 303-311, May.
    9. Horan, Richard D. & Shortle, James S. & Abler, David G., 1998. "Ambient Taxes When Polluters Have Multiple Choices," Journal of Environmental Economics and Management, Elsevier, vol. 36(2), pages 186-199, September.
    10. Segerson, Kathleen, 1988. "Uncertainty and incentives for nonpoint pollution control," Journal of Environmental Economics and Management, Elsevier, vol. 15(1), pages 87-98, March.
    11. Jensen, Frank & Vestergaard, Niels, 2002. "Moral hazard problems in fisheries regulation: the case of illegal landings and discard," Resource and Energy Economics, Elsevier, vol. 24(4), pages 281-299, November.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Developing countries; groundwater use; moral hazard problems; taxes;

    JEL classification:

    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

    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:foi:wpaper:2011_3. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Geir Tveit). General contact details of provider: http://edirc.repec.org/data/foikudk.html .

    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 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 profile, as there may be some citations waiting for confirmation.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.