Local content requirement policies typically call for a foreign investor to source a portion of its procurements from local suppliers in the domestic economy. Local content requirement policies have long been studied for various industries, and there is currently a vibrant debate on their design or implementation in extractive industries, such as minerals, oil, or gas, especially in resource-rich low-income countries. Our objective in this paper is to characterise optimal local content requirement policies in the context of extractive industries. If an optimal local content requirement policy serves to monetise the positive externalities from foreign investment, then it is, in essence, a Pigouvian subsidy, which is a first-best policy, but the incremental volume of business which it may induce is a function not only of the size of the positive externalities but also of the response of local suppliers to new business opportunities. We discuss four implications: providing high-powered incentives for investor compliance, harvesting the investor's superior information, managing the host government's administrative burden, and mitigating the risk of infantilising local suppliers.

In the face of water scarcity, growing water demands, population increase, ecosystem degradation, or climate change, transboundary watercourse states inevitably have to make difficult decisions on how finite quantities of water are distributed. Such waters, and their associated ecosystem services, offer multiple benefits. Valuation and bargaining can play a key role in the sharing of these ecosystems services and their associated benefits across sovereign borders. Ecosystem services in transboundary watercourses essentially constitute a portfolio of assets. While challenging, their commodification, which creates property rights, supports trading. Such trading offers a means by which to resolve conflicts over competing uses and allows states to optimise their 'portfolios'. However, despite this potential, adoption of appropriate treaty frameworks that might facilitate a marketbased approach to the discovery and allocation of water-related ecosystem services at the transboundary level remains both a challenge and a topic worthy of further study. Drawing upon concepts in law and economics, this paper therefore seeks to advance the study of how treaty frameworks might be developed in a way that supports such a market-based approach to ecosystem services and transboundary waters.

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