Sustainable Irrigation And The Role Of Economic
Instruments And Their Supporting Institutions
Author(s)
K. W. Easter
Abstract
This paper identifies a number of institutions that are critical for the financial
sustainability of irrigation projects. The framework of analysis is based on
Williamson’s four-levels of institutions (Williamson, O.E., The new institutional
economics: taking stock, looking ahead, J. of Economic Literature, 38
(September), pp. 595–613, 2000) which are used to highlight the importance of
institutions and the problems that arise when implementing institutional change.
Examples are provided of institutional reforms and changes that have helped
different countries raise both cost recovery and collection rates. A key objective
in designing water instruments is to provide farmers and managers assurance
regarding the actions of others in the system. Without the appropriate
institutions, it is difficult to effectively use economic instruments such as water
prices, taxes, or markets to improve the financial sustainability of irrigation
projects.
Keywords: cost recovery, economic instruments, water pricing, institutional
arrangements, financial sustainability.
1 Introduction
Strong finances to support and maintain both irrigation and its associated
drainage system are essential for sustainable irrigation. Historically, the lack of
adequate finances has resulted in inadequate system operation and maintenance
(O&M) and caused many irrigation systems to be built with inadequate control
structures and, in many cases, no facilities for drainage. The end result has been
projects that decline rapidly in their ability to provide adequate and timely water
delivery. In a few years these same projects also face declining irrigated acreage
as water logging and salinity problems force land out of production. Thus, once
it has been determined that it is appropriate to build an irrigation system of a
Keywords
cost recovery, economic instruments, water pricing, institutional
arrangements, financial sustainability.
Related Book
Other papers in this volume
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