Environmental Valuation & Cost-Benefit News
Mutual monitoring in a tradable water rights system: A case study of Zhangye City in Northwest China
03/10/08
11:03:21 am, by damageva 
, 210 words, 254 views 
Categories: Water, Academic Study/Journal Article, Agriculture, Forestry and Food, China, Costs and Benefits
Mutual monitoring in a tradable water rights system: A case study of Zhangye City in Northwest China
Abstract: Tradable water right systems are becoming important ways to achieve distributive efficiency in water resources. In 2002, China's Ministry of Water Resources initiated a pilot project in Zhangye City in Northwest China. The project was designed to establish a new water use rights system with tradable water quotas with the hope of reallocating water resources more efficiently through market-based instruments. However, the tradable water right system is not well enforced. Based on both primary and secondary data, we find that mutual monitoring can improve the effectiveness of a water allocation and trading program. For both surface water and groundwater irrigation systems, the conditions needed to stimulate mutual monitoring include: (1) a hierarchical management system; (2) well defined water rights or quotas; (3) control of total water quotas and water sources by the upper hierarchy; and (4) an approximate balance between the water supply or pumping capacity and the water quota. We describe also the institutional requirements for stimulating mutual monitoring.
Keywords: Transaction costs; Principal–agent theory; Irrigation area
by Jun-Lian Zhang and Feng-Rong Zhang; both of College of Resources and Environmental Science, China Agricultural University, No. 2 Yuanmingyuan West Road, Beijing 100094, China; Tel.: +86 10 62732950; fax: +86 10 62732498.
Agricultural Water Management via Elsevier Science Direct www.ScienceDirect.com
Volume 95, Issue 3; March, 2008; Pages 331-338
http://dx.doi.org/10.1016/j.agwat.2007.10.016
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