Bringing water markets down to Chile’s Atacama Desert

TLDR

The Chilean water model has been described as a textbook example of a successful free water market system. The study examines water‑rights transactions in the Atacama Desert to challenge the neoliberal view that Chile’s unregulated water market reallocates water to the highest‑value uses and to question its status as the most unregulated system. The authors analyze water‑rights transactions in the Atacama Desert to assess the market’s behavior. The authors find that the state, rather than the market, is the central actor in water allocation.

Abstract

The Chilean water model has been described as a textbook example of a successful free water market system. This paper analyses water-rights transactions to determine how this water market has behaved in the northern Atacama Desert. It questions the neoliberal assumption that Chile's unregulated water market has acted as an active tool to reallocate water towards uses that provide the highest economic value. Instead, it argues that the state is the central actor in water allocation. This problematizes the notion that the Chilean water model is one of the most unregulated in the world.