Water and Mountains, Upstream and Downstream: Analyzing Unequal Relations

This chapter analyzes unequal access to water with a special focus on the Central Asian situation. It emphasizes the crucial issue of property rights and examines what happens when these are distributed in ways that lead to major inefficiencies and conflict. The chapter first presents a game theoretical investigation of this type of conflict situation and then ways in which the conflict might be solved if parties continue having relative risk aversion. In the case of Central Asia this type of solution would lead to mutually beneficial outcomes if credibility problems were lifted by using international institutions to guarantee the observance of contracts that contain prescriptions to share benefits associated with a change in the property rights structure.