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Abstract:
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"The agricultural economy of South Asia and the livelihood of millions are tied to current patterns of groundwater use. Groundwater currently irrigates between one half and three quarters of irrigated land in South Asia. This development has not, however, been brought about by the state, whose program of public tubewells has been widely acknowledged as a failure (Dhawan 1995). Instead, 95% of this water is pumped from privately owned wells, which supplies a burgeoning market in groundwater. In the ongoing ideological tussle between state and market-led approaches to resource development, this has been hailed as a victory by market triumphalists. Today, there is a chorus of support for private ownership of wells in conjunction with sales of groundwater, a form of groundwater development that has reaches its most sophisticated expression in the state of Gujarat, India (Shah 1993). Advocates of this approach argue that the role of policy makers is simply to nudge the market toward greater competition.
"In this paper I take issue with this interpretation of groundwater markets in Gujarat, I argue that the system of exchange for groundwater in Gujarat is deeply embedded in social relations. I describe exchange systems that do not follow abstract laws of supply and demand nor bend completely to competitive forces, but that are forged collectively in the crucible of local politics. Markets for groundwater in Gujarat are, in Polanyi's terms, an 'instituted process'. To make policy, we need to understand this process. To understand this process, we need to explore the social and hydrological context of water exchange, and place this in historical perspective. This paper will undertake this task in two villages in North Gujarat.
"In this paper I do not explore the merits and demerits of the provision aspects of the problem which rests on the question of private property rights. Instead, I explore the contention of the Gujarat model that the 'assignment problem' familiar to students of common pool resources (CPRs) has been effectively addressed by market discipline, and the corollary that the role of public policy is merely to stimulate market competition.
"I begin by introducing the primary case village. I then describe the patterns of purchase and sale for water in this village and the degree of dependence on purchased groundwater. The next section describes the rules under which water is exchanged. A description of rules sets the stage for a discussion of how those rules are constructed and contested. Next, I briefly, sketch the operation of water markets in a nearby village that provides a stark contrasting case. The final selection concludes by drawing implications for policy and theory."
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