Tradable Property Rights to Water

In most countries, water is still regarded as public property. Public officials decide who gets it, at what price, and how it is used. The government also takes responsibility for building and operating the necessary hydraulic infrastructure for water delivery. The track record of such administered systems of water allocation has not been impressive. Despite growing water scarcity and the high costs of hydraulic infrastructure, water is typically underpriced and used wastefully, the infrastructure is frequently poorly conceived, built, and operated, and delivery is often unreliable. Water quality has not been well maintained, and waterlogging and salinity have not been properly controlled. These systems also have tended to favor the relatively wealthy. Wealthier farmers manage to get easier access to water rights, which are usually obtained without charge and for whose use farmers pay only a small fraction of the cost of building and operating the associated irrigation infrastructure. Similarly, while the better-off residents in many cities in developing countries enjoy access to cheap, municipally supplied water, many of the poor in the same cities must resort to very expensive private water truckers to meet their daily needs. Recent government efforts to improve the management of water resources have moved away from building hydraulic infrastructure to strengthening institutions, improving pricing policies, and handing management down to water associations and communities. This approach has worked well when public funds have been available, when institutions have been strong and effective, and when there has been close cooperation among water users. But as public finances become more strained and conflicts among users grow, the chances of this approach