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Posted By goopsgoops in Planning and Management

Availability of natural resources such as water, forests and land throughout the world has decreased over time (both in terms of quantity and quality) as a result of development and expansion of urbanization and agriculture. The inevitable consequences of increased demand for, and decreased supply (including deteriorating quality) of, various natural resources, especially water, is an increase in the value of these scarce resources and their services, leading to increased competition over their allocation. Therefore, there is a need for comprehensive and stable arrangements of a sustainable nature that will satisfy all parties involved, directly and indirectly.

Regional conflict, negotiation, and cooperation are three possible stages in a process that results in an economic system that may, under certain conditions, lead to regional arrangements vis-à-vis resource allocation and management. In this paper I will discuss the conditions under which a regional cooperative arrangement is possible, and to what degree economic considerations alone provide the basis for cooperation. Economically optimal arrangements of a cooperative nature have to fulfill efficiency requirement. Such arrangements should be associated with additional gains to the participants. They also have to address issues of justice and fairness associated with the allocation of the resulting benefits or the joint cost.

Economic concepts are applicable in the case of resource conflicts arising from market failure; they can be used to design institutions and organizational solutions in terms of rules and structures that are socially desirable; and they identify solutions that are associated with gains to all parties involved in the conflict (Loehman and Dinar A., 1995). The literature provides several methods that can be adapted to finding cooperative solutions. After acquainting ourselves with cooperative principles in the next section, I will briefly review several approaches and demonstrate how they have been applied to water resource-related cooperative analyses. This will be followed by several examples of actual cases of cooperation over water in various parts of the world. The lessons learned are summarized in the concluding section. -

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