Scarcity and the Evolution of Water Rights in the Nineteenth Century: the Role of Climate and Asset Type
Abstract: The adoption of a hybrid approach to water rights (the California doctrine) in some western states of the US and Australia creates some doubt as to what factors drive scarcity and the evolution of property rights to water. Commentators have argued climate is the only variable that affects water scarcity. This can explain why private rights (prior appropriation) were adopted in western states of the US during the nineteenth century. However, it cannot explain why the hybrid approach, where common and private rights co-existed, persisted in nine of seventeen arid US states and two Australian colonies. This paper shows that in addition to climate, the dominant type of asset investment impacts water scarcity via the mobility constraint. We present a framework that combines climate and asset type in order to determine the net effects on water scarcity to predict when and where common and/or private water rights will evolve. Empirical evidence from several countries is used to verify the frameworks predicative capacity. The findings show the combination of these two variables is better able to explain the emergence and persistence of the hybrid California doctrine as well as the adoption of ‘pure’ private rights (the Colorado doctrine) in eight of seventeen US states than if we rely on climate alone.
