Rent Seeking and Institutional Evolution within the California Water Game

35 Pages Posted: 18 May 2021

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; George Mason University - Mercatus Center

Multiple version iconThere are 2 versions of this paper

Date Written: May 18, 2021

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. When those directives are legitimated by court rulings, they 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 to legislative and regulatory changes in traditional water law. Institutional transformation expanded the membership for the arena of water governance in California, allowing parties who do not locally interact with or depend upon water and its allocation in California. 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 18, 2021). GMU Working Paper in Economics No. 21-07, Available at SSRN: https://ssrn.com/abstract=3848946 or http://dx.doi.org/10.2139/ssrn.3848946

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)

HOME PAGE: http://mason.gmu.edu/~rwagner/

George Mason University - Mercatus Center ( email )

3434 Washington Blvd., 4th Floor
Arlington, VA 22201
United States

HOME PAGE: http://ppe.mercatus.org/scholars/richard-wagner

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