Egypt, Ethiopia, and the Nile: The Economics of International Water Law
25 Pages Posted: 20 Aug 2014
Date Written: August 19, 2014
As part of a Symposium on the book The Economic Foundations of International Law, this Article briefly compares and contrasts two distinct analytical approaches to international law — doctrinal versus economic — in the context of Egypt’s and Ethiopia’s dispute over the right to exploit the Nile River’s water resources. The Article argues that the traditional doctrinal approach, one based solely on an examination of international water law, treaties, and customary international law is unlikely to result in a legal conclusion that either state is likely to respect because such an approach fails to consider the incentives, material capabilities, and national interests of Egypt and Ethiopia. However, the Article argues that an economics approach focusing on state preferences and incentives for compliance with international law in a world without a central enforcement mechanism will better illuminate the obstacles that Egypt and Ethiopia face and the likelihood of legal resolution of the conflict. After examining the interests and political constraints on both states, the Article concludes with a simple application of transaction costs economics, focusing on property rights and liability rules, to understand how Egypt and Ethiopia might respond to different legal arrangements designed to resolve the conflict.
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