5. Conclusion: A call to action

Table 1 (continued)

Task

Task of deciding how the water from available sources (ground water, surface water and nonconventional water) is distributed across places and people in the reach of that node. Local information about the relative value of water across competing uses. Local information about whether others are likely to comply with restrictions (information pertinent for legitimacy). Local governments representing the places and people in the reach of that node. Local decisions about water allocation to farmers, industries and cities through local political processes and townhall meetings. Local decisions about selling any part of water entitlement to another local government, or buying additional water from another.

Information needed to perform task Type of government agency with informational advantage

Task of managing water service delivery in utilities. Utility-specific technical information. Greater autonomy to utility managers and staff. Service delivery performance indicators through consumer surveys, testing of water quality, and monitoring of non-revenue water.

Output expected

Quantity restrictions (quotas) on water supply for irrigation and across different farms devised by agriculture ministry—monitored and enforced by local government. Quantity restrictions on water supply to households devised by utilities— local government to win compliance of citizens.

5. Conclusion: A call to action

Just as MENA has led the world in building the hard infrastructure for harnessing water (eg. dams and desalination plants), now it needs to lead the world in building the soft infrastructure of institutions that may be equally important to manage the common pool problem of water. MENA’s starting point of centralized state control over the management and allocation of water can be an advantage because it enables moving incrementally towards the intermediate institutions where market forces and state control can be balanced. For example, there is less ideological resistance in MENA to an appropriate role for the state than in a country like the United States, where political polarization and knee-jerk reactions against government is preventing solutions to acute water problems.

Going forward, this chapter makes a call for more “learning by doing” through country-context-specific projects, using the tools of economics to help reform leaders and their external partners design policies, try out reforms, evaluate impact, and iterate towards those reforms that show evidence of success13. That is, projects and reforms do not need to “wait” until research is done, but rather, can use ideas emerging from an economic approach to institutions and try them, learning to do better from both success and failure. Policy experimentation and impact evaluation are needed on:

• how to design water tariffs and how/whether to combine revenues from tariffs with general budget transfers for the financial sustainability of utilities (regardless of whether they are operated by private partners, corporate structures, or as arms of government ministries). Survey evidence is needed on citizen attitudes to different tariff structure (some of which may resonate with ideas of fairness of justice), and evaluating impact of outreach and different tariff structure on willingness to pay and actual revenues. Investing in such survey evidence and

13 This is how other sectors—such as health, education, social protection—have been building new, concrete policies for improved outcomes.