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Designing property rights for water: mediating market, government, and corporation failures

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Abstract

Recent decades have seen an acceleration in public concern about the allocation of increasingly scarce water supplies. There are many reasons for this concern, such as growth in urban populations. In this article, we focus on how surface water’s special qualities (the combination of spillovers, rent-seeking behavior, and common pool resources) complicate the assignment of property rights in any legal framework. These characteristics make specific market structures necessary in order to efficiently allocate rights. The state usually designs those structures. Yet, just like markets can fail, so can governments fail to effectively allocate those rights. So designers often turn to quasi-judicial conservancy boards as a second-best solution. We argue that those boards may themselves fail through a form of “corporation failure.” We address these three types of failures, and offer an analysis of two cases that suggests that the likelihood conservancy boards will suffer from corporate failure depends on the actions of the boards and outside stakeholders (like governments).

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Notes

  1. Pigou, quoted in Milliman (1962, p. 199).

  2. The following are hybrid states: California, Kansas, Nebraska, North Dakota, South Dakota, Oklahoma, Oregon, Texas, and Washington.

  3. We note that riparian rights can be sold to a non-riparian landowner (Ferry 2004, p. 260).

  4. Benton County has sued twice, losing once and settling in the other (Washington State Department of Ecology 2004; City of West Richland, et al v. Department of Ecology, et al. 2004). In 2005, Klickitat County sued the Department of Ecology over a decision reversal; the case was settled out of court by modifying the agreement the Klickitat WCB had made with applicant (Washington State Department of Ecology 2006).

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Authors and Affiliations

  1. Department of Public Administration and Policy, The University of Georgia, 204 Baldwin Hall, Athens, GA, 30602-1615, USA

    Andrew B. Whitford

  2. Department of Public Administration and Policy, School of Public & International Affairs, The University of Georgia, 204 Baldwin Hall, Athens, GA, 30602-1615, USA

    Benjamin Y. Clark

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  1. Andrew B. Whitford
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  2. Benjamin Y. Clark
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Correspondence to Andrew B. Whitford.

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Whitford, A.B., Clark, B.Y. Designing property rights for water: mediating market, government, and corporation failures. Policy Sci 40, 335–351 (2007). https://doi.org/10.1007/s11077-007-9048-5

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