Legal, Administrative and Economic Tools for Conflict Resolution

Abstract

Alternative mechanisms for the resolution of conflict between competing uses and users of river basins need to be judged by their respective effects on efficiency, equity, and macro-economic policy. Efficiency should go beyond financial considerations, and assess true real resource costs and all benefits whether or not reflected in revenues. Equity concerns compensation for loss of legitimate expectations as well as equal treatment of equals and distributive justice. Macro-economic policy concerns effects on inflation, unemployment, balance of payments, etc. Legal and administrative measures involve a prior assignment of rights, duties, powers, etc., and then some expectations about the nature of the transactions that will occur between the various parties in the light of that prior assignment. Market mechanisms can be analysed in the same way. Various possible structures and types of interaction are then explored, from which it is concluded that no system is likely to work well unless it ensures that all decision makers are put in a position where they have to weigh all the costs and benefits generated by their actions, and not just those that accrue to them themselves.