From the Peripheral Canal in California to synfuel plants in the Rockies to sinkholes in Florida, the approaching water crisis is increasingly on the nation’s mind. Terry Anderson offers a unique and informative perspective on this issue.
Early settlers in the West established an efficient property rights system for allocating water. But when competition developed for water, property rights were overturned as water users turned to the government for guaranteed access. The costs and benefits of water use were separated, and demand increased faster than supply. Today these problems are growing more severe, and political conflict over water is increasing. Anderson explains how we got to our current predicament and describes how a new set of market‐oriented institutions could head off the water crisis and reduce political conflicts.