Market Approaches to Water Allocation: Lessons from Latin America

Abstract

Abstract: Latin American experiences with water markets offer lessons to the U.S. because they have emerged in different political and economic contexts. The Western U.S. experience has been longer and has defined some of the world's classic cases of market allocation of water. These cases, however, have been driven by domestic factors and have evolved within domestic social and institutional contexts, which are easy for people in the U.S. to take for granted. Looking at Chile and Mexico can help us see Western U.S. water allocation with fresh eyes. These Latin American cases have been strongly influenced by international theories and policy debates, forcing the question of how to adapt foreign ideas to local realities. The Chilean case in particular shows the strong relationship between market approaches and institutions for water governance and sustainability. A comparative perspective might help loosen the gridlock that characterizes many Western U.S. water problems.