Why are there so few basin-wide treaties? Economics and politics of coalition formation in multilateral international river basins

Abstract

Examinations of international water treaties suggest that riparian states are not heeding the advice to adopt IWRM. Theories suggest that the larger the number of negotiating states, the lower the cost (per state) of the joint operation of treaties, but the higher the transaction costs of negotiating and maintaining them. We model the trade-off between benefits and costs associated with the number of treaty signatories and apply it to a global treaty dataset. Findings confirm that the transaction costs of negotiation and the economies of scale are important in determining the paucity of basin-wide agreements, the treaties' content and their extent. ARTICLE HISTORYcan contribute to acceptable and effective management of transboundary rivers (in this article we do not address transboundary aquifers), but effectiveness appears to depend on the specific design features of the treaties.Research focusing on international water agreements covering multilateral basins also suggests that treaties that include all the riparian states (basin-wide treaties, such as the 1967 La Plata agreement) are exceptionally rare, existing in only 13% of the world's multilateral basins (Giordano et al., 2013). This finding contradicts the international agencies, environmentalists and engineers who encourage states to negotiate and reach basin-wide agreements to develop the basin in an efficient manner. With the exception of qualitative case studies (Kempkey, Pinard, Pochat, & Dinar, 2009;Waterbury, 2002), there is little systematic empirical analysis of the factors influencing the formation and design of basin-wide accords. Consequently, we are unable to provide policy advice to mediators attempting to promote the formation of basin-wide accords.This article seeks to fill this gap in the literature by attempting to explain the factors accounting for the relatively low number of basin-wide agreements in multilateral basins and for the content of these agreements. Combining theories of international relations and economics, we consider the influence of two factors. The first is the transaction costs of negotiating, enforcing and monitoring treaty commitments among a larger number of signatory riparian states. The second is economies of scale: the benefit of having a large group of states involved in the treaty, which could lower the average cost of the joint activity for each state. We examine the impact of these two factors not only on treaty formation but also on treaty contents, looking at the specific topics and problems addressed in water treaties (or issue areas) and the institutional features. Treaties governing international basins can cover various issues, such as allocating the river's waters, environmental regulation, hydropower generation, groundwater regulation, navigation, fishing, irrigation and infrastructure development. River treaties can also include institutional mechanisms for implementing the treaty and maintaining future cooperation. We examine the influence of economies of scale and transaction costs in the basin-wid...

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