Achieving Efficiency in Water Allocation: A Review of Domestic and International Practices

Abstract

As populations grow and demand for clean water increases managing and allocating scarce water resources is becoming an increasingly important task. A vital part of this task is establishing the appropriate framework for the water sector which includes establishing effective property rights to water and the appropriate institutional arrangements to allocate these rights. In this paper we outline the current framework for water allocation and management in New Zealand. We identify a number of issues with the current framework and arguethat these issues are significant enough to warrant consideration of possible alternatives. The obvious firrst place to look for alternative approaches is at overseas arrangements particularly in countries with recent experience in the reform of their water sectors. We outline the arrangements for a number of countries and establish lessons for New Zealand. Although there is no single model of best practice that we identify some basic principles of good water management that will generate benefits for New Zealand.