Hydro-economic models (HEMs) are powerful tools to analyze water scarcity, drought, and water management problems. Though several HEMs reviews have been conducted in the recent past, none of them focused on the management of transboundary river water disputes, benefit sharing, or trade-offs. Therefore, this review explored how HEMs can suggest mitigating water sharing disputes on transboundary rivers. Though more than 300 HEMs have been developed worldwide, very few focused on transboundary river water disputes. After vigorous screening at Google Scholar, only 25 articles were found which focused on transboundary river water disputes. Most HEMs that were reviewed proposed to share benefits such as sharing hydropower produced from the river, reallocating water from low-value agriculture to high-value agriculture or managed operation of the dam, or other monetary compensation. But no study assessed non-water sector benefit sharing such as trade or transit. Most HEMs focused on irrigation and hydropower which are benefits from the river and very few studies focused on fisheries, environment, and wetland which are benefits to the river. International rivers can act as a catalyst among the riparian countries and promote cooperation in trade, commerce, exchange of technologies, and other fields. HEMs can play an important role in this regard. It is to be mentioned that HEMs cannot resolve water conflicts in a shared basin, they only can propose for the options of solution.

There are more than 260 transboundary rivers in the world, which are sometimes the cause of conflict. Therefore, management of these rivers is important not only for the economy but also for harmony and peace. Various methods are followed to resolve water-sharing disputes. A systematic review was carried out to determine how water disputes are resolved. It was found that cooperation, mediation, perfect river basin organisation, a proper monitoring system, information exchange, and benefit-sharing are the keys to success. On the other hand, non-cooperation, disregard of international water laws, water hegemony, imbalance of military power, and the absence of a proper institution, mediator, or benefit-sharing approach are the causes for failure of transboundary river management. This study also summarised the evaluation report of the river basin management and diagnosed whether the riparian countries are successful in conflict management, diagnosing 53% of the river basins as successful, 35% as unsuccessful, and 12% as neutral (neither successful nor unsuccessful). This result indicates that there is dissatisfaction with 35% transboundary rivers of the world. It was also revealed that the most frequently identified mode for resolving water conflict is benefit-sharing.

There are more than 260 transboundary river basins in the world which cover nearly half of the Earth’s surface. These rivers, traversing around 145 countries, are a common cause of conflict between nations. The case study selected for this study is the Teesta River, a tributary to the Brahmaputra which flows from India to Bangladesh, where water sharing between India and Bangladesh has a long and disputed history. The model quantifies economic net benefit of opportunities to share water between the countries using a Hydro-Economic Model (HEM). Whilst HEMs exist for many transboundary river basins including the Nile Basin, the Ganges Basin, the Mekong, Volta, and Amu Darya, most HEMs that treat transboundary water issues consider a limited scope of water values most frequently including: agriculture, hydropower, and municipal water uses. However, water has many additional values including navigation, environment, fisheries, and water quality. This study adds to the HEM literature by considering a wider range of benefits than have commonly been included in HEM assessments of transboundary water sharing in the past. Results show that a re-allocation scenario with more water flowing over the border from India to Bangladesh leads to an overall annual basin-wide gain. The estimated loss for India (mostly lost hydropower value) would be substantially greater if non-extractive flow related benefits for fisheries, navigation, sediment transport and environment were not accounted for. Similarly, estimated gain for Bangladesh would be much less if these non-extractive flow related benefits were ignored.