Transboundary Externalities and Regional Integration

  • Rainer Durth


Due to population growth and higher per capita use, human water use has increased tenfold over the last hundred years and is approaching 80% of the volume of fresh water that currently can be harnessed on a basis, both economically and ecologically sustainable.1 Since most of the fresh water supply is surface water from rivers and lakes, international river systems, covering almost half the land surface of the earth and being home to 44% of the world’s population,2 will become an increasingly contentious issue over the next few decades. Unless the competing claims of the riparian states can be satisfied through cooperation, they will lead to international conflicts in the medium term, as the current tensions in the Middle East exemplify. Upstream-downstream problems are problems of externalities in which the external effect always operates in the same direction, i.e. downstream. The classical economic solution to external effects is internalization: only if all parties adjacent to the river have to bear the full economic consequences of their actions will optimum utilization of the river be achieved.3


Efficiency Gain Riparian State International Negotiation Private Party International River 
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© Springer-Verlag Berlin Heidelberg 1998

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  • Rainer Durth

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