Scarcity, Entitlements and the Economics of Water in Developing Countries

Every year, worldwide, 2 million people die from diarrhoeal diseases – 1.7 million of these are children. This is 10 times the total number of people killed by wars in the world annually. It is also known that improving access to water and sanitation could save most of these lives. However, water provision is paradoxical. Although we live on a planet where three-quarters of its surface is water, humankind can use only 0.26 per cent of the total. Other key factors for water scarcity include:

· economic and social power at the global and local scales often creates massive barriers to access by the poor and even the middle classes;
· religious and cultural differences make water distribution a far more complicated issue to tackle via traditional development policy; and
· cases of extreme political tension are often related to water distribution and its accumulation.

This book develops a comprehensive approach to this problematic. Chapter 2 observes water “scarcity” as a relative concept. Although in economics the concept of scarcity might lead to more efficient distribution, when conceived in physical terms, scarcity implies the potential emergence of serious social and political conflicts. From this standpoint, several international comparative analyses of water scarcity are conducted, for example correlations between rainwater availability and distribution, internal water availability and intensity of use, national GDP and level of use, population and storage capacity, among many others. These analyses contradict several taken-for-granted assumptions about water availability and its distribution in the world. Chapter 3 focuses on water supply as one of the key targets of the Millennium Development Goals. This section examines the most influential factors on access to water and sanitation, and how in some cases privatization of infrastructure services can improve access to water; however, other factors such as demographics and national economics must also be considered.

The book also focuses on transboundary water resource disputes. Problems around interstate waters emerge everywhere, due to the conflictive nature of water property rights. Furthermore, in cases of river waters, the asymmetry between upstream and downstream users creates deeper conflicts of rights. Chapter 4 thus presents a review of some theoretical factors (economic, legal, sociological and political) aimed at understanding systemically river water disputes. Two cases from the US are examined in-depth. Chapter 5 follows this thread, focusing on disputes at the micro level in India, a country that although at a national level shows considerable recent improvements in access to water, at the regional and urban levels denotes various inequalities and conflicts emerging. These conflicts are not only technical but also political, historical and sociological. Still in India, Chapter 6 revises access to water supply and issues of inequality in the city of Chennai, observing how national and urban scale improvements to water access are independent factors. This is because national level analysis and policies are unlikely to capture the complexity and embedded inequality in access that is much visible in urban space. Several urban scale institutional arrangements and locational problems are analyzed. Chapter 7, using the same case study, stresses consumers’ preferences as another key factor for scarcity, since water delivery implies several technical alternatives usually determined by budget and cultural aspects. Clearly, designing appropriate policies and institutions to address inequalities in water distribution is important. However, there has been much debate around two competing paradigms: the rights-based approach and the capability approach. Chapter 8 observes the second one as a better development way. This approach is based on the expansion of substantive freedoms for people instead of focusing merely on people’s needs. Yet these capabilities mu