Irrigation Service Markets in Bangladesh: Private Provision of Local Public Goods and Community Regulation?

Abstract

"The exploitation of groundwater for agricultural production in Bangladesh has been crucial to the agricultural growth that has enabled Bangladesh to emerge from being the 'basket case' to a sort of self sufficiency in staple food production in the last 20 years together with significant reductions on HCR poverty. This has come about not through the innovative aid dependent NGOs for which Bangladesh has become famous, but largely through private investment in tubewells selling irrigation services (water) to farmers of contiguous blocks of land, evidently overcoming collective action problems posed by the fragmented and unequal land holding structure, and confounding pessimistic prognoses of several political economies. Groundwater drawdown externalities are not crucial in most areas due to the abundance of the resource. Competition in these markets can perhaps be modeled as 'contestable' and 'embedded'; disputes are regulated (perhaps imperfectly) by creative use of indigenous dispute resolution institutions and various cultural, economic, social and political resources. Poverty is reduced but the implications for inequality are not clear - but which is of greater significance?'"