Document Type
Article
Publication Date
3-2012
Publication Title
Environmental and Resource Economics
Abstract
Increasingly, central governments approach contentious natural resource allocation problems by devolving partial decision-making responsibility to local stakeholders. This paper conceptualizes devolution as a three-stage process and uses a simulation model calibrated to real-world conditions to analyze devolution in Spain’s Upper Guadiana Basin. The Spanish national government has proposed spending over a billion euros to reverse a 30 year decline in groundwater levels. We investigate how the government can most effectively allocate this money to improve water levels by utilizing its power to set the structure of a local negotiation process. Using a numerical Nash model of local bargaining, we find that if the national government creates appropriate incentives, local bargaining can produce water stabilization. The actual water levels that will emerge are highly dependent on the central government’s decisions about the budget available to local stakeholders and the default policy, which will be influenced by the relative value the government places on various financial and environmental outcomes. Our paper concludes by determining the relationship between these relative valuations and the government’s preferences over water levels.
Keywords
Bargaining theory, Devolution, Water policy, Political economy
Volume
51
Issue
3
First Page
453
Last Page
470
DOI
doi.org/10.1007/s10640-011-9507-5
Rights
©2012 the authors
Recommended Citation
Marchiori, Carmen; Sayre, Susan Stratton; and Simon, Leo K., "Bargaining and Devolution in the Upper Guadiana Basin" (2012). Economics: Faculty Publications, Smith College, Northampton, MA.
https://scholarworks.smith.edu/eco_facpubs/5
Comments
Peer reviewed accepted manuscript.