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Water

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World Bank research on water resources is guided by a water strategy. The research program focuses on

  • water resource management, and
  • trans-boundary water cooperation.
Contact: Mike Toman, mtoman@worldbank.org
 Research focus Research outputs |  Related links  |  Researchers 
 

Water resource management
Institutional and policy challenges in efficiently managing water resources.

  • Economic value of water
  • Water management institutions

Transboundary water cooperation
Challenges and opportunities for managing shared water resources.

  • Climate change and international water treaties - Water regimes in many transboundary (as well as domestic) basins will be altered in one way or another as climate changes. International river basin management is at the core of many governments concerns about water vulnerability.
 Research outputs

"Water hauling and girls' school attendance : some new evidence from Ghana." Celine Nauges and Jon Strand, World Bank Policy Research Working Paper 6443,  2013.

In large parts of the world, a lack of home tap water burdens households as the water must be brought to the house from outside, at great expense in terms of effort and time. This paper studies how such costs affect girls' schooling in Ghana, with an analysis based on four rounds of the Demographic and Health Surveys. Using Global Positioning System coordinates, it builds an artificial panel of clusters, identifying the closest neighbors within each round. The results indicate a significant negative relation between girls' school attendance and water hauling activity, as a halving of water fetching time increases girls' school attendance by 2.4 percentage points on average, with stronger impacts in rural communities. The results seem to be the first definitive documentation of such a relationship in Africa. They document some of the multiple and wide population benefits of increased tap water access, in Africa and elsewhere.

 

"Economy-wide implications of direct and indirect policy interventions in the water sector: lessons from recent work and future research needs."  Ariel Dinar,  World Bank Policy Research Working Paper 6068,  2012.

Water is increasingly becoming a limiting factor for sustainable economic growth and development in many countries. Its allocation has significant impacts on overall economic efficiency, particularly with growing physical scarcity in certain regions. Greater water supply variability further increases vulnerability in affected regions. Water also has become a strategic resource involving conflicts among those who may be affected differently by various policies. This paper analyzes various policy interventions aimed at improving water allocation decisions, using a novel approach that incorporates macro and micro level considerations in a unified analytical framework. The framework facilitates assessment of various linkages among policies and their impacts within individual sectors and economy-wide. Drawing on country based studies in Morocco, South Africa, Turkey, and Mexico, the analysis reveals difficult tradeoffs among various policy objectives, including priorities placed on different sectors, regional advantages, and general economic efficiency gains versus broader social impacts. The comparison of policy impacts demonstrates the usefulness of the framework in information that policy makers can use to rank the policy interventions according to the emphasis placed on different policy objectives. The paper also compares approaches used in other studies that apply computable general equilibrium models in various contexts of water, environment and agriculture.

"Accessing economic and political impacts of Hydrological variability on treaties : case studies on the Zambezi and Mekong basins." Brian Blankespoor, Alan Basist, Ariel Dinar and Shlomi Dinar,  World Bank Policy Research Working Paper 5996,  2012.
 
International river basins will likely face higher hydrologic variability due to climate change. Increased floods and droughts would have economic and political consequences. Riparians of transboundary basins governed by water treaties could experience non-compliance and inter-state tensions if flow falls below levels presumed in a treaty. Flow information is essential to cope with these challenges through water storage, allocation, and use. This paper demonstrates a simple yet robust method, which measures gauge station runoff with wetness values derived from satellite data (1988-2010), for expanding sub-basin stream flow information to the entire river basin where natural flow information is limited. It demonstrates the approach with flow level data that provide estimates of monthly runoff in near real time in two international river basins: Zambezi and Mekong. The paper includes an economic framework incorporating information on existing institutions to assess potential economic and political impacts and to inform policy on conflict and cooperation between riparians. The authors conclude that satellite data modeled with gauge station runoff reduce the uncertainty inherent in negotiating an international water agreement under increased hydrological variability, and thus can assist policy makers to devise more efficient institutional apparatus.

"Valuing water quality improvement in China : a case study of lake Puzhehei in Yunnan province," Hua Wang, Yuyan Shi, Yoonhee Kim, Takuya Kamata, World Bank Policy Research Working Paper 5766,  2011.

While polluted surface water is encountered across most of China, few economic valuation studies have been conducted on water quality changes. Limited information about the economic values associated with those potential water quality improvements or deteriorations is a disadvantage for making proper choices in water pollution control and clean-up activities. This paper reports an economic valuation study conducted in Yunnan, China, which aims to estimate the total value of a real investment project to improve the water quality of Lake Puzhehei by one grade level. Located in Qiubei County, which is far from large cities, the lake has been experiencing fast water quality deterioration in the past years. A conservative estimation strategy shows that on average a household located in Qiubei County is willing to pay about 30 yuan per month continuously for 5 years for water quality improvement, equivalent roughly to 3 percent of household income. The elasticity of willingness-to-pay with respect to income is estimated to be 0.21. The economic rate of return of the proposed project is estimated to be 18 percent, indicating a strong demand and high efficiency of investment in water quality improvement in China. This study also demonstrates that previous knowledge about water quality changes and the project may have a significant positive impact on people's valuation, and that the interviewer effect on valuation can be negative.
Municipal solid waste management in small towns : an economic analysis conducted in Yunnan, China Hua Wang, Jie He, Yoonhee Kim, Takuya Kamata,  World Bank Policy Research Working Paper 5767,  2011.

Municipal solid waste management continues to be a major challenge for local governments in both urban and rural areas across the world, and one of the key issues is their financial constraints. Recently an economic analysis was conducted in Eryuan, a poor county located in Yunnan Province of China, where willingness to pay for an improved solid waste collection and treatment service was estimated and compared with the project cost. This study finds that the mean willingness to pay is about 1 percent of household income and the total willingness to pay can basically cover the total cost of the project. The analysis also shows that the poorest households in Eryuan are not only willing to pay more than the rich households in terms of income percentage in general, but also are willing to pay no less than the rich in absolute terms where no solid waste services are available; the poorest households have stronger demand for public solid waste management services while the rich have the capability to take private measures when public services are not available.
 

"Nature, Socioeconomics and Adaptation to Natural Disasters: New Evidence From Floods," 
Susana Ferreira, Kirk Hamilton, Jeffrey Vincent, World Bank Policy Research Working Paper 5725, 2011.

The authors analyze the determinants of fatalities in 2,194 large flood events in 108 countries between 1985 and 2008. Given that socioeconomic factors can affect mortality right in the aftermath of a flood, but also indirectly by influencing flood frequency and magnitude, they distinguish between direct and indirect effects of development on flood mortality. The authors find that income is negatively associated with the frequency of floods and, conditional on their magnitude, the fatalities they cause in developing countries. However, for developed countries they find that increased income is associated with more fatalities, both directly (conditional on flood occurrence and magnitude) and indirectly through an increase in the frequency and magnitude of flood events. Also in contrast to the literature, they find that the effect of governance on flood frequency and fatalities in developing countries is U-shaped, with improvements in governance reducing the numbers of floods and deaths when governance is weaker but raising them when governance is stronger.

"Low-level versus high-level equilibrium in public utility service,"
Jon Strand, World Bank Policy Research Working Paper 5723, 2011.

Heterogeneity of public utility services is common in developing countries. In a "high-level" equilibrium, the quality of utility services is high, consumer willingness to pay for services is high, the utility is well funded and staff well paid in order to induce high quality of performance. In a "low-level" equilibrium the opposite is the case. Which alternative occurs depends on both the quality of utility management, and public perceptions about service quality. If a utility administration has the potential to offer high-quality service, and the public is aware of this, high-quality equilibrium also requires the public’s service payments to be high enough to fund the needed pay incentives for the utility staff. When the public lack knowledge about the utility administration’s quality, the public’s initial beliefs about the utility administration’s quality also will influence their willingness to make adequate service payments for a high-quality equilibrium. This paper shows that, with low confidence, only a low-level equilibrium may exist; while with higher initial confidence, a high-level equilibrium become possible. "Intermediate" (in between the low- and high-level) outcomes also can occur in early periods, with "high-level" outcomes later on.

Climate Change and State Grievances: The Water Resiliency of International River Treaties to Increased Water Variability,” S. Dinar, O. Odom, A. McNally, and B. Blankespoor, Pradeep Kurukulasuriya, Insights, Durham University, 3(22): 1-32, 2010.

As water variability in international river basins is expected to increase, due to the predicted effects of climate change, inter-state agreements to settle consequent disputes become paramount. Specifically, the mechanisms that states negotiate as part of these agreements are important. We argue that our best attempts to consider the ability of states to deal with variability in the future rests with considering how the agreements have fared in the past.  In this paper we investigate whether particular mechanisms help mitigate inter-country tensions over shared water. We utilize a corpus of documented international water treaties pertaining to water quantity or allocation, hydropower and flood-control (those issues most affected by water variability), and the Basins at Risk events database to test particular hypotheses regarding the viability, or resiliency, of treaties to water variability. In general, we argue that particular treaty features and mechanisms are more apt to deal with decreased or increased river flow – in our particular case measured as a derived coefficient of variation pertaining to precipitation and river run-off. In essence, the presence of these instruments in a given treaty should decrease the likelihood of riparian complaints or grievances regarding the issue at hand. Treaties are coded for the particular mechanisms sought, and the events database is combed for related grievances and events. Our theory considers other control variables, but in this draft paper we investigate one in particular – trade. Generally, our statistical analysis finds that treaty mechanisms that are flexible and binding, with respect to flow variability, correspond with a decrease in the frequency and intensity of country complaints. Particular institutional mechanisms (e.g. enforcement, conflict resolution/dispute resolution and drought adaptation) also matter in further reducing country grievances due to flow variability and consequent treaty compliance problems.

 
The impact of water supply variability on treaty cooperation among international bilateral river basin riparian state,” A. Dinar, B. Blankespoor, S. Dinar, and P. Kulukurasuriya, World Bank Policy Research Working Paper 5307, 2010.

This paper assesses the impact of water supply variability on treaty cooperation between international bilateral river basin riparian states. Climate change is anticipated to change the variability of water supply, as well as its expected magnitude. Previous studies have focused mainly on water scarcity, measured in terms of mean precipitation or per capita water availability in the country, as a trigger for conflict or cooperation. The water variability measure used here captures both annual runoff variability and precipitation variability over periods of 30 and 100 years. The analysis used economic and international relations data to identify incentives for international cooperation in addressing water supply variability. The authors find that small-to-moderate increases in variability create an impetus for cooperation, although large increases in variability would reduce incentives for treaty cooperation. Stronger diplomatic and trade relations support cooperation, while uneven economic power inhibits cooperation. Various measures of democracy/governance suggest different impacts on cooperation across the basin riparians. The findings have policy implications in the context of preparedness for impacts of climate change on the water sector.

"Quantifying institutional impacts and development synergies in water resource programs: a methodology with application to the Kala Oya basin, Sri Lanka," R. Maria Saleth and Ariel Dinar, World Bank Policy Research Working Paper 4498, 2008.

The success of development programs, including water resource projects, depends on two key factors: the role of underlying institutions and the impact synergies from other closely related programs. Existing methodologies have limitations in accounting for these critical factors. This paper fills this gap by developing a methodology, which quantifies both the roles that institutions play in impact generation and the extent of impact synergies that flows from closely related programs within a unified framework. The methodology is applied to the Kala Oya Basin in Sri Lanka in order to evaluate the impacts of three water-related programs and the roles of 11 institutions in the context of food security. The results provide considerable insights on the relative role of institutions and the flow of development synergies both within and across different impact pathways. The methodology can also be used to locate slack in impact chains and identify policy options to enhance the impact flows.

 

"Monopoly Power and Distribution in Fragmented Markets: The Case of Groundwater ," H.G. Jacoby, R. Murgai, S. Ur Rehman, Review of Economic Studies 71(3), 783-808, 2004. (Based on World Bank Policy Research Working Paper 2628, 2001.)

This research studies the market for groundwater extracted by private tubewells in Pakistan's Punjab province. Groundwater markets are characterized by barriers to entry and spatial fragmentation and thus are potentially monopolistic. In the study area, groundwater and tenancy contracts are often interlinked, with share-tenants gaining access to water through the use of their landlord’s tubewell. An analysis of groundwater transactions shows that tenants of tubewell owners are charged lower prices than other customers. Tubewell owners and their tenants also use considerably more groundwater on their plots than do other farmers. Taken together, this evidence suggest the presence of monopoly power in the groundwater market. Although the welfare cost of this distortion is found to be significant, it is small relative to total household income.
 

 
 Related links
World Bank operational web sites related to water.
 
 Researchers

Core Team

Collaborative Researchers

 World Bank Research on Water

(Please use the free Adobe Acrobat Reader PDF to view PDF files)
The following policy research working papers are drawn from the World Bank's institutional archives. Each link opens a page with an abstract of the document and several download options. For papers before 2007, please use document search at econ.worldbank.org/docsearch.


Last updated: 2011-08-29

Library

WPS6443Water hauling and girls' school attendance : some new evidence from GhanaNauges, Celine; Strand, Jon2013/05
WPS6068Economy-wide implications of direct and indirect policy interventions in the water sector: lessons from recent work and future research needsDinar, Ariel2012/05
WPS5996Assessing economic and political impacts of Hydrological variability on treaties : case studies on the Zambezi and Mekong basinsBlankespoor, Brian; Basist, Alan; Dinar, Ariel; Dinar, Shlomi2012/03
WPS5766Valuing water quality improvement in China : a case study of lake Puzhehei in Yunnan provinceWang, Hua; Shi, Yuyan; Kim, Yoonhee; Kamata, Takuya2011/08
WPS5723Low-level versus high-level equilibrium in public utility serviceStrand, Jon2011/06
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