Stealing from the poor? : game theory and the politics of water markets in Chile

Despite all the potential benefits that are usually attributed to a system of tradable water rights, few countries have fully implemented such a legal institution. The Chilean water market is the exception, often promoted by international organisations such as the World Bank. Experts and governmental officials repeatedly argue that negative social consequences of the Chilean water market have been limited. This paper questions these claims and argues – using game theory combined with empirical evidence – that the introduction of a water market in Chile has created an obvious incentive to violate the water rights of underprivileged users. (Publisher's abstract)