The Economics of Transboundary River Management

Tinbergen Institute Discussion Paper 14-132/VIII

39 Pages Posted: 7 Oct 2014

See all articles by Erik Ansink

Erik Ansink

VU University Amsterdam - Department of Spatial Economics

Harold Houba

VU University Amsterdam, Department of Econometrics; VU University Amsterdam, Tinbergen Institute

Date Written: October 6, 2014

Abstract

We survey the economics of transboundary river water allocation, which emerged in the 1960s and has matured over the last decade due to increasing concerns over water scarcity and pollution. We outline the major approaches and pay specific attention to the strategic aspects of transboundary river water allocation. These strategic aspects are captured by employing game theory to assess the economics of transboundary river water allocation in a simple model of river sharing. This model allows us to show how conflict and cooperation over transboundary water resources may occur. It also allows us to pay specific attention to the efficiency, sustainability, and fairness of solutions to this model. We compare and contrast both cooperative and non-cooperative approaches and we relate their solutions to illustrative examples.

Keywords: River sharing problem, River claims problem, Fairness, Efficiency, Sustainability, Water allocation agreement, Bargaining, Water trade, Sharing rules, Axiomatic approach

JEL Classification: C71, C73, D63, D74, F53, Q25

Suggested Citation

Ansink, Erik and Houba, Harold E. D., The Economics of Transboundary River Management (October 6, 2014). Tinbergen Institute Discussion Paper 14-132/VIII. Available at SSRN: https://ssrn.com/abstract=2505989 or http://dx.doi.org/10.2139/ssrn.2505989

Erik Ansink (Contact Author)

VU University Amsterdam - Department of Spatial Economics ( email )

De Boelelaan 1105
1081HV Amsterdam
Netherlands

Harold E. D. Houba

VU University Amsterdam, Department of Econometrics ( email )

De Boelelaan 1105
Amsterdam, 1081 HV
Netherlands

HOME PAGE: http://personal.vu.nl/h.e.d.houba/

VU University Amsterdam, Tinbergen Institute ( email )

De Boelelaan 1105
Amsterdam, 1081 HV
Netherlands

HOME PAGE: http://personal.vu.nl/h.e.d.houba/

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