The new institutional economics of India’s water policy : a paper presented at the international workshop on ‘African Water Laws: Plural Legisla...

Much institutional analysis in the water sector at national as well as global levels has focused principally on the working of law, policy and administration of water sector—the three pillars of water institutions. In New Institutional Economics, these constitute the IE (IE) of the water economy, which is distinguished from institutional arrangements (IA). The latter are humanly imposed ‘rules in use’ that govern the behavior of
water users and producers, and dealings between them. Water User Associations, pump irrigation markets, fishery co-operatives and contractors, urban tanker water markets are examples of institutional arrangements (IA). NIE’s central concern about ‘why economies fail to undertake appropriate activities if they had a high pay-off’ is of great interest to actors in the IE —governments, NGOs, donors, policy makers, legislators, local administrators. These therefore have views about and keen interest in shaping IA to improve the working of the water economy. In this paper, we explore issues involved in unleashing performance-enhancing change in IA’s. [authors abstract]