Water Allocation Systems

Based on the studies of past water conflicts, specifically those in the Middle East and Northern Africa, Franklin Fisher and others developed the optimization model. The idea behind the optimization model, which is also called the Water Allocation System (WAS), is to allocate water in the way that will maximize benefits to all people who depend on that water. (Due to the fact that the WAS contains references to several economic principles, the Economic Principles section can be used as a reference for those complex concepts.) Because water is a scarce resource in limited supply, it is said to be constrained, which means that it is limited or restricted. According to Fisher, “shadow values” need to be considered when coming up with a solution to the problem. Fisher explains the following:

The shadow value associated with a particular constraint shows
the extent to which the net benefits from water usage would increase
if that constraint were relaxed. For example, where a pipeline's
capacity is limited, the associated shadow value shows how much
benefits would increase if capacity were slightly increased-this
is the amount that those benefiting would be willing to pay for
such an increase in capacity. The shadow value of water at a
particular location shows the increase in systemwide benefits that
would occur if an additional cubic meter of water were available
at that location (Fisher andAskari 54).

It is useful to think about this concept in terms of supply and demand. If the water flowing from a given well were limited, there would be many benefits to finding some method of increasing the output of the well. However, that would cost money. According to Fisher, the shadow value of water from that well most likely does not equal the cost of providing it there. When we think about ways to get more water, the additional water might only be provided if another source were utilized. And that loss of water from the new source has a cost assigned to it – the cost is that others may have been using that water and will no longer be able to use it. Another possible cost would be that a new well would have to be built, which involves construction costs. To continue with the WAS, Fisher makes the following assertions to be used as a guide to help villages and governments make decisions on how to get more water:

• Water will be produced at a given location only if the shadow value of water at that location is greater than the cost of producing it. • If water can be transported from one location to another, then the shadow value of water at the second location should never exceed the shadow value at the first location by more than the cost of transportation. • An activity should be increased if it is profitable using shadow values; an activity that loses money using these values should be decreased (Fisher and Askari 54).

These concepts can be considered with the help of a government official or a Non-Governmental Organization (NGO). This model of allocating water will help the individuals in the village work with representative from the government or an NGO make decisions on how the water can best be allocated, while maximizing the benefits to all involved. Fisher provides the following examples of how the WAS model has been used to reduce conflict and help provide water to groups that had previously been constrained:

• cost-benefit analysis of the infrastructure that would be required to bring additional water to Israel from the Litani River in Lebanon (assuming full peace and Lebanese agreement to sell water to Israel); • a cost-benefit analysis of reducing leakage in the water system of Amman; and • the relationships among desalination at Gaza, a pipeline between Gaza and the West Bank, and the amount of water owned by the Palestinians (Fisher and Askari 54).

The WAS model has some useful applications. It can provide an objective framework whereby conflicting groups can come together and discuss the issues. It will allow each party to see what is at stake not only for themselves, but also for the others involved. If the competing groups are able to see the issues from the perspectives of one another, the may find that it would be a good idea to work together to build the water structures together and share in those costs. Fisher also discusses the ideas of water permits as a possible method of resolving conflict among competing groups. To read more about those ideas, please refer to the footnoted items to find out how to access those writings.

Fisher further discusses the plausibility of the WAS in relation to the World Bank projects involving water issues. The World Bank works with many nations to provide financing options for water projects. He advises the World Bank to remain cognizant of the many uses of water and the potentially competeing interests they may be ignoring by financing some projects and not others. Fisher believes that the World Bank should “implement a holistic approach to water and water-related projects.” He provides the following recommendations to the World Bank:

First, the Bank should use and promote the use of WAS-type models to
assist all countries with ::domestic water management to optimize the use
of available water. Second, the Bank and the countries involved should
recognize that some "nonwater" projects, such as those in agriculture
(for example, those involving the use of fertilizers or pesticides), have
implications for a country's water supply and may also have an impact on
water supplies in other countries. Third, the Bank should use similar WAS-type
models for regions to address regional water issues in countries that are
water interdependent and in situations where some countries have water surpluses
while others have deficits. Fourth, the Bank should provide a continuous forum
for countries with interdependent water resources to discuss the results of
regional wateroptimization-management models. Fifth, the Bank should foster
cooperation-in particular, by facilitating the sale of water permits among
countries as mentioned above. Sixth, where countries and regions are following
its prescriptions and shortages still persist, the Bank should provide some of
the financial resources necessary for efficient large-scale desalination
projects (Fisher and Askari 55).

REFERENCE: Fisher, Franklin M. and Hossein Askari. “Optimal Water Management in the Middle East and Other Regions.” Finance and Development 38 (September 2001): 52-56.

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