Institutions for Managing Ground and Surface Water and the Theory of the Second-Best

Karl Jandoc (), Richard Howitt (), James Roumasset and Christopher Wada
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Karl Jandoc: Department of Economics, University of Hawai`i at Manoa, Honolulu, Hawai`i, USA
Richard Howitt: Department of Agricultural and Resource Economics, University of California at Davis, Davis, California, USA

No 201415, Working Papers from University of Hawaii at Manoa, Department of Economics

Abstract: We review the theory of optimal conjunctive-use management absent transaction costs as a point of departure for a second-best theory of management. We first explore the problem of optimal pricing of surface water when groundwater remains unregulated. We then move to consideration of institutional mechanisms for managing groundwater. The last section discusses the transaction cost difficulties with water markets and how these can be mitigated with remote sensing technology, much as barbed wire facilitated private property in the American West.

Keywords: Groundwater management; Second-best policy; Conjunctive use; Water institutions; Institutional change. (search for similar items in EconPapers)
JEL-codes: D23 H21 P14 Q25 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2014-05
New Economics Papers: this item is included in nep-agr
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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