Water shortages are primarily due to mismanagement of water resources. And mismanagement, especially in agriculture, is largely the fault of centralised control by government officials. Water is often under-priced, leading to wastage and poor conservation. Even on the rare occasions when government planners have priced water to near-efficient levels they have been incapable of tracking changing demand, leaving hundreds of millions of people without access to clean water.

There are typically no financial or political incentives for governments or other providers to introduce supplies for the poor nor are there incentives to reduce wasteful usage by powerful political interests. Conventional public goods arguments have inadvertently provided a rationale for governments to manipulate this resource, which it typically has a monopoly over, for its own political ends.

In this book, Roger Bate argues that water markets in which individuals (or corporations and municipalities) trade their entitlements to water introduce flexibility, reduce waste, allow fairer distribution, more rational development of new resources, and therefore smaller environmental
impacts. Furthermore, as buyers and sellers only trade where there is mutual benefit to both, markets can build relationships between natural enemies; competition may replace conflict.

This book argues that conflict can be reduced through market mechanisms. It focuses on countries like Australia that have allowed and encouraged water trading markets to develop and the benefits they have produced. By looking at semi-arid countries (those with the least available supply) Bate shows how we can better manage this precious resource.

Roger Bate is a resident fellow at AEI. He researches aid policy in Africa and the developing world, evaluating the performance and effectiveness of USAID, the World Bank, the Millennium Challenge Corporation, NGOs, as well as other aid organisations and development policy initiatives. He writes extensively on topics such as health policy and endemic diseases in developing countries (malaria, HIV/AIDS); water policy; international environmental and health agreements (industrial chemicals, climate change, and water); and genetically modified organisms and pesticide policy.