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Coordinating Policy Initiatives Between Governments in the Water Industry

Congress: 2008
Author(s): Brian Davidson, Biju George, Hector M Malano
Department of Civil & Environmental Engineering, University of Melbourne, Australia-3010

Keyword(s): Governance, policy coordination, transboundary river basins
AbstractIn this paper the possibilities of negotiating the coordination of water sharing between governments is investigated in general and applied to the individual governments in the Krishna Basin in India. In this basin the water is shared between three rival states, all who need more water and suffer from inter-sectorial competition. Compounding the problem is that the flows of water along the basin are tied up in regulations and rules that were determined many years ago. Improvements to flows could potentially benefit people in all three states. However, the individual governments need to cooperate if this is to occur, something they so far have refused to do so. The question of whether coordination between interdependent markets is worthwhile revolves around individual states deciding between taking a unilateral approach or accepting a multilateral approach to policy settings on water. The model that is presented in this paper attempts to resolve this question from an individual governments’ perspective. The model developed in this paper relies on understanding both the economic and diplomatic imperatives of the individual governments involved. No government is going to act in concert with another if there is no measurable benefit to it from doing so. Consequently, all governments need to gain something from coordinating water policy initiatives. In terms of an economic outcome, any transfer in water between states that arises from coordinating water sharing rules, has the potential to be beneficial to all states. However, a problem arises with some citizens within a state gaining, while others within that same state lose from changing water allocation rules. These outcomes can be shown in terms of a simple economic trade model, and provide the evidence for why individual governments are not keen on trading water or on coordinating policies which change the flows of water between them. For this reason alone it is argued that individual governments will not even enter into a negotiation process over water flows between states. However, such a model is inadequate as it also needs to be recognised that governments do not always conduct intergovernmental relationships with an economic goal in mind. To overcome this limitation, an International Theory perspective is added to the economic trade model. In this model individual governments are assumed to act according to one of three rules. They want to either: • maintain hegemony between the competing desires of other governments; • selfishly maximise gains to their own constituents; or • reform other governments. It was found that this model, an extended trade model that accounted for the individual motivations of governments, might be useful in bringing the individual governments together to negotiate better water sharing and flow regulations, as it tends not to be as narrow and unrealistic as a simple trade model.
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