Read aguanomics http://www.aguanomics.com/ for the world’s best analysis of the politics and economics of water I started this paper 2 years ago while working in Saudi Arabia. I was trying to understand the “rationality” behind desalination projects that made little economic sense. In San Diego, for example, it would be cheaper to reduce demand for water used on lawns than to spend $1 billion on a new desalination plant to bring more supply. After a lot of thinking, I came round to a political explanation: desalination “makes sense” when politicians allocate costs to one group (usually “the commoners”) and deliver benefits to another (usually special interests), but there are clear exceptions, as you’ll see in the paper.
“Desalination and the commons: tragedy or triumph?” International Journal of Water Resources Development (forthcoming)
Abstract: A policy is more likely to be economically efficient when its costs and benefits fall on the same group, but politicians can allocate costs and benefits to different groups within their jurisdictional commons. This article examines the distribution of costs and benefits from desalination projects using examples from San Diego, Almería and Riyadh. The examples illustrate how mismatches between costs and benefits can persist or change as politicians adjust the policy portfolio to balance inefficiency and political risk.