International Water Law and Fresh Water Dispute Resolution: A Coasean Perspective

41 Pages Posted: 15 Nov 2019 Last revised: 14 Mar 2020

See all articles by Tamar Meshel

Tamar Meshel

University of Alberta Faculty of Law

Moin A. Yahya

University of Alberta - Faculty of Law

Date Written: November 6, 2019

Abstract

When it comes to resolving interstate freshwater disputes, International Law has developed a set of rules that relate to both the substance of these disputes, and the conduct of the disputing countries. ‘Equitable and reasonable utilization’ is commonly considered as the leading ‘substantive’ rule, ‘no significant harm’ as subsidiary to it, and the ‘duty to cooperate’ as the central ‘procedural’ rule. The purpose of this article is to analyze the merits of these substantive and procedural rules under the lens of the celebrated Coase theorem. The second part of the Coase Theorem observes that if transaction costs are present, then the legal rule governing the dispute between two parties should be one that minimizes the bargaining costs. This will ensure that the legal rule will generate an optimal allocation of resources. When it comes to international freshwater disputes there are usually high transaction costs such as unequal and asymmetric access to information by both the disputing parties and adjudicating tribunal, enforcement uncertainty, and unclear political goals of the parties. Therefore, a liability rule such as ‘equitable and reasonable utilization’ only furthers the uncertainty and bargaining costs, whereas a property rule such as ‘no significant harm’ is better at achieving dispute resolution (both theoretically and empirically). Moreover, when a so-called procedural rule such as the ‘duty to cooperate’ is imposed on the parties, this ensures a better negotiation environment, which leads to better dispute resolution outcomes even when imposed by a third party.

Keywords: Coase, Law & Economics, International Water, Freshwater, Equitable Utilization, Harm, Duty to Cooperate

JEL Classification: K33, K41, Q25

Suggested Citation

Meshel, Tamar and Yahya, Moin A., International Water Law and Fresh Water Dispute Resolution: A Coasean Perspective (November 6, 2019). University of Colorado Law Review, Vol. 92, No. 2, 2021. Available at SSRN: https://ssrn.com/abstract=3482185 or http://dx.doi.org/10.2139/ssrn.3482185

Tamar Meshel (Contact Author)

University of Alberta Faculty of Law ( email )

Law Centre (111 - 89 Ave)
University of Alberta
Edmonton, Alberta T6G 2H5
Canada

HOME PAGE: http://www.ualberta.ca/law/faculty-and-research/profiles/tamar-meshel

Moin A. Yahya

University of Alberta - Faculty of Law ( email )

Edmonton, Alberta T6G 2H5
Canada
780-492-4445 (Phone)
780-492-4924 (Fax)

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