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Bargaining and devolution in the Upper Guadiana Basin

Marchiori, Carmen, Sayre, Susan Stratton and Simon, Leo K. (2012) Bargaining and devolution in the Upper Guadiana Basin. Environmental and Resource Economics, 51 (3). pp. 453-470. ISSN 0924-6460

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Abstract

Increasingly, central governments approach contentious natural resource allocation problems by devolving partial decision-making responsibility to local stakeholders. This paper conceptualizes devolution as a three-stage process and uses a simulation model calibrated to real-world conditions to analyze devolution in Spain's Upper Guadiana Basin. The Spanish national government has proposed spending over a billion euros to reverse a 30 year decline in groundwater levels. We investigate how the government can most effectively allocate this money to improve water levels by utilizing its power to set the structure of a local negotiation process. Using a numerical Nash model of local bargaining, we find that if the national government creates appropriate incentives, local bargaining can produce water stabilization. The actual water levels that will emerge are highly dependent on the central government's decisions about the budget available to local stakeholders and the default policy, which will be influenced by the relative value the government places on various financial and environmental outcomes. Our paper concludes by determining the relationship between these relative valuations and the government's preferences over water levels.

Item Type: Article
Official URL: http://www.springerlink.com/business-and-economics...
Additional Information: © 2011 Springer
Library of Congress subject classification: H Social Sciences > HD Industries. Land use. Labor
Sets: Departments > Geography and Environment
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 20 Oct 2011 15:20
URL: http://eprints.lse.ac.uk/39005/

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