Rent Seeking and Institutional Evolution within the California Water Game

26 Pages Posted: 7 May 2016

See all articles by James Caton

James Caton

North Dakota State University - Department of Agribusiness and Applied Economics; American Institute for Economic Research; North Dakota State University - NDSU Center for the Study of Public Choice and Private Enterprise

Richard E. Wagner

George Mason University - Department of Economics

Date Written: May 7, 2016

Abstract

When directives rather than contracts determine rights to water flows, agents will substitute away from securing water rights by contract toward securing them through political directives. Especially when they are legitimated by court rulings, such directives alter the rules that govern social interaction. While farmers are able to secure water under different institutional arrangements, alterations in those arrangements through legislation and regulation can induce changes in organizational and allocative patterns of resource usage. In particular, we explore evolution in agricultural organization in California in response legislative and regulatory changes in traditional water law. To this end, we analyze the relationship between Big Players in the California Water Game and the reorientation of a water rights regime in light of legal precedent and actions from existing regulatory bodies.

Keywords: water rights; riparian systems; appropriative systems; rent seeking; Big Players; overlapping jurisdictions; political tectonics

JEL Classification: B52, D23, D73, H77, Q25

Suggested Citation

Caton, James and Wagner, Richard E., Rent Seeking and Institutional Evolution within the California Water Game (May 7, 2016). GMU Working Paper in Economics No. 16-12. Available at SSRN: https://ssrn.com/abstract=2776980 or http://dx.doi.org/10.2139/ssrn.2776980

James Caton

North Dakota State University - Department of Agribusiness and Applied Economics ( email )

Fargo, ND 58105
United States

American Institute for Economic Research

PO Box 1000
Great Barrington, MA 01230
United States

North Dakota State University - NDSU Center for the Study of Public Choice and Private Enterprise

811 2nd Ave N.
Fargo, ND 58102
United States

Richard E. Wagner (Contact Author)

George Mason University - Department of Economics ( email )

4400 University Drive
334 Enterprise Hall
Fairfax, VA 22030
United States
(703) 993-1132 (Phone)

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