Academic economists have many insights to contribute to water management at all scales. These contributions need to be placed in local institutional contexts and reconciled with insights from other... Show moreAcademic economists have many insights to contribute to water management at all scales. These contributions need to be placed in local institutional contexts and reconciled with insights from other disciplines if they are to affect policy, action, and evaluation. Case studies offer a useful way to organize different lines of thinking in the classroom or the field. This article reviews these factors—academic vs. practical perspectives; economic vs. other disciplines—and provides a framework for teaching water economics by building problem-based case studies. Show less
Do you worry that there is not enough water for people, the economy and environment? Do you wonder if the water in our taps and rivers is safe or polluted? Do you want to know if farmers waste... Show moreDo you worry that there is not enough water for people, the economy and environment? Do you wonder if the water in our taps and rivers is safe or polluted? Do you want to know if farmers waste water, utilities charge too much, or bottled water destroys ecosystems? You're not alone in asking questions. The headlines say "drought, pollution, conflict and insecurity," but the stories don't offer any solutions. Living with Water Scarcity clarifies the connections among personal and social water flows in an accessible style. It describes the origins and costs of water scarcity and explains how to address it with fair and pragmatic policies. You and your community can live with water scarcity -- just manage water as the precious resource it is. Show less
Water scarcity turns into shortage when water supplies are mismatched with user demands. After clarifying the different social and private uses of water, I explain how to use prices to allocate... Show moreWater scarcity turns into shortage when water supplies are mismatched with user demands. After clarifying the different social and private uses of water, I explain how to use prices to allocate treated ("utility") water among municipal and industrial users and untreated ("raw") water among irrigators. Assuming institutional capacity, successful management of water scarcity requires prices that constrain total demand and revenues that cover the cost of reliable supply. Public acceptance of effective water pricing requires that policies protect the poor and the environment, i.e., policies that prioritize "social water" over water competitively allocated among economic uses. Show less
Dutch drinking water companies now deliver safe affordable water to the entire population, but this result was not planned. It emerged, rather, from an evolutionary process in which various... Show moreDutch drinking water companies now deliver safe affordable water to the entire population, but this result was not planned. It emerged, rather, from an evolutionary process in which various pressures on the commons resulted in changes to drinking water systems that addressed old concerns but uncovered new problems. Our analytical narrative traces this problem-solution-new problem pattern through four eras in which a common-pool dilemma is addressed by a private-good solution (1850-1880), a club-good solution (1880-1910) and a public-good solution (1910-1950) before returning to a private-good solution in the last 1950-1990 era. Actions, like the dates just given, were not always exact or effective, as the process was shaped by changing social norms regarding the distribution of costs and benefits from improved water services. This Dutch history is unique, but its insights can help improve drinking water services elsewhere. Show less
This paper examines the relations between tariffs and sustainability, efficiency and equity, using a unique data-set for 308 cities in 102 countries. Higher water tariffs are correlated with lower... Show moreThis paper examines the relations between tariffs and sustainability, efficiency and equity, using a unique data-set for 308 cities in 102 countries. Higher water tariffs are correlated with lower per capita consumption, smaller local populations, lower water availability, higher demand and a lower risk of shortage. Aggregating to the national level, higher tariffs are correlated with higher GDP and better governance. A different country-level analysis shows that a higher percentage of the population with water service is correlated with better governance, higher GDP and a greater risk of water shortage. The relation between water prices and service coverage is statistically inconsistent. Show less
