Document Type

Article

Publication Date

12-31-2011

Publication Title

Strategic Behavior and the Environment

Abstract

This paper assesses the political implications of intra-aquifer heterogeneity in the benefits and costs of optimal groundwater management. We use simulation modeling to predict groundwater extraction regimes under two alternative local decision-making structures and compare these structures to optimal management. Local collective action performs poorly when the intra-aquifer disparity in the potential gains is large. Moreover, large intra-aquifer disparity is generally associated with large potential gains. As a result, local collective action is unlikely to be successful in capturing the largest welfare gains. Individual subregions within a groundwater basin almost always benefit most from political structures whose outcomes diverge from optimal management. These results may be of particular interest to policymakers in California. The state of California currently allows local regions to make their own decisions about groundwater management with little outside intervention. The analysis in this paper suggests that there may be regions where large potential gains from optimal management are available, but cannot be realized by the two alternative local political institutions. This suggests that there may be a role for State intervention in the local political processes by which local water management decisions are made.

Keywords

Collective action, Nash bargaining, Groundwater

Volume

2

Issue

1

First Page

61

Last Page

82

DOI

dx.doi.org/10.1561/102.00000010

Rights

©2011 The authors

Comments

Peer reviewed accepted manuscript.

Included in

Economics Commons

Share

COinS
 
 

To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.