at ILRI (room 3.62)
Preliminary results of the Water Valuation and Pricing project, which is one of the projects of the Water for Food and Ecosystems Programme, will be presented.
This presentation aims to clarify the apparent gap between the role that economic instruments might play in addressing irrigation water management problems in theory and in practice on the basis of experiences from five case studies (selected from the other projects of the Water for Food and Ecosystems Programme).
Although in theory market clearing prices and tradable water rights can lead to an efficient allocation, the case studies show that economic instruments - such as pricing to control demand and trading - are rarely found in the real world. Outcomes of the market do not seem to result in an allocation that meets the preferences of society. <{Preliminary results of the Water Valuation and Pricing project, which is one of the projects of the Water for Food and Ecosystems Programme, will be presented.
We will discuss the observed absence of market solutions and (we believe) potentially limited role of market clearing prices and tradable water rights in the water sector.
The project proves that it is hard in practice to solve issues which are essentially political in nature (like income distribution) "by" economics. Such issues can just be better understood "through" economics.