Environmental and Resource Economics

, Volume 18, Issue 1, pp 43–60 | Cite as

Flexible Water Sharing within an International River Basin

  • D. Marc Kilgour
  • Ariel Dinar


Increasing scarcity of water resources, and greatervariability in available water supply, are causingacute difficulties for allocation agreements amongusers of water bodies. One cause of controversy,especially for river waters, is the inability of mostallocation operations to accommodate variations inconditions. In this paper we develop a flexiblemechanism that produces a Pareto-efficient allocationfor every possible flow volume in a river. Extensionsto accommodate other kinds of variation, such as waterdemand, are feasible. The mechanism is demonstratedusing historical water flow data for the Ganges, basedon stylized water demand relationships for India andBangladesh. Quantitative comparison between fixed andvariable allocation suggests that variable allocationsubstantially outperforms fixed allocation, improvingregional welfare by at least ten percent.


Water Resource River Basin Water Body Water Supply Water Flow 
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Copyright information

© Kluwer Academic Publishers 2001

Authors and Affiliations

  1. 1.Department of MathematicsWilfrid Laurier UniversityWaterlooCanada
  2. 2.Rural Development DepartmentThe World BankWashingtonUSA

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