THE PERSISTENCE OF CORRELATIVE WATER RIGHTS IN COLONIAL AUSTRALIA: A THEORETICAL CONTRADICTION?

This paper analyses whether the evolution of water law in the Australian colony of New South Wales (NSW) contradicts theoretical models that suggest in arid countries correlative, land based water rights will be replaced with individual ownership. Evidence from NSW shows a series of Supreme Court decisions between 1850-1870 adopted correlative riparian rights thereby implying that common law was inefficient. However, further consideration of factors that gave rise to these decisions suggests the value of water was higher when used in unity because of the arid climate and non-consumptive nature of water use in the pastoral industry. The findings suggest that where intensity of water use is low, economic development is dominated by industries requiring low levels of capital investment, and acute water scarcity prevails, correlative water rights are efficient.water rights, common law

DAMS AND DISPUTES: WATER INSTITUTIONS IN COLONIAL NEW SOUTH WALES, AUSTRALIA, 1850-1870

This paper will analyse the operation of the British common law of riparian rights in the Riverina District of New South Wales (NSW), Australia between 1850 and 1870.* Theorists argue that the predisposition of people to fight over or cooperate to exploit valuable resources depends on how well property rights are defined and enforced.† The operation of the riparian doctrine in the Riverina provides an empirical, historical example of why inefficient property rights promote violence. Violence in this instance was based on collective action directed at the destruction of water supply infrastructure, specifically dams, constructed on various rivers within the Riverina. This paper considers why collective action in violence did not spill over into infrastructure construction. It is argued that the failure of collective action was due to its high costs stemming from several factors: failure to meet optimal group size; problems of free riders; hold-up concerns; and the introduction of a much disputed land policy in 1861 referred to as selection.

LOBBYING FOR LEGISLATION: AN EXAMINATION OF WATER RIGHTS TRANSITION IN COLONIAL VICTORIA, AUSTRALIA 1840-1886

This paper analyses the transition of water rights institutions in Victoria, Australia, between 1840 and 1886. It will focus on the shift from the common law doctrine of riparian rights to government control of water supplies via quasi-government organisations known as irrigation trusts examining factors leading to this transition and whether it increased institutional efficiency. Evidence suggests transition to government control resulted from two factors. First, the decreasing costs of using government relative to costs of private redefinition because settlement numbers increased thereby increasing scarcity while adding to costs of private investment in redefinition due to higher negotiation and enforcement costs, legal uncertainty, and the inability for private actors to capture the full benefit of a transition. In this way, transition was efficient as it lowered transaction costs associated with creating irrigation schemes to provide water supply security. Second, crisis of drought that increased in magnitude over the period due to changes in dominant farming methods from land extensive grazing to land intensive crop farming. Drought escalated demands, via lobbying, for government action. Combined, these two factors explain why an efficiency enhancing transition from riparian rights to government control took place at this juncture in Victoria's history..

An Analysis of Watermove Water Markets

This paper conducts an analysis of the water markets in Victoria covered by Watermove. The analysis in this paper examines the weekly trading activity across trading zones. For the majority of trading zones there is little trading activity that occurs. There are three trading zones in which the markets for temporary water rights are reasonably active and liquid on a weekly basis, and for these zones an analysis is conducted of their demand and supply elasticities and consumer and producer surplus. The results of this analysis suggest a stronger relationship on the supply side between prices, volumes, elasticity and producer surplus.Water, Water markets, Elasticities, Consumer and Producer Surplus

De Facto and De Jure Property Rights: Land Settlement and Land Conflict on the Australian, Brazilian and U.S. Frontiers

We present a general model of the interaction between settlement and the emergence of de facto property rights on frontiers prior to governments establishing and enforcing de jure property rights. Settlers have an incentive to establish de facto property rights to avoid the dissipation associated with open access conditions. The potential rent associated with more exclusivity drives the “demand’ for commons arrangements. As the potential rental stream from land increases due to enhanced scarcity there is a greater demand for more exclusivity beyond what can be sustained with commons arrangements. In some instances claimants will petition the government for de jure property rights to their claims – formal titles. In other instances it may be cheaper to acquire titles through fraudulent means. To the extent that governments supply property rights to those with first possession, land conflict will generally be minimal, though there may be political protests. But, governments face differing political constituencies and may not allocate de jure rights to the current claimants. Moreover, governments may assign de jure rights but not be willing to enforce the rights. This may generate potential or actual conflict over land depending on the violence potentials held by the de facto and de jure land claimants. We examine land settlement and land conflict on the frontiers of Australia, the U.S. and Brazil. We are particularly interested in examining the emergence, sustainability, and collapse of commons arrangements in specific historical contexts. Our analysis indicates that the emergence of demand driven de facto property rights arrangements was relatively peaceful in Australia and the U.S. where claimants had reasons to organize collectively. The settlement process in Brazil was more prone to conflict because agriculture required fewer collective activities and as a result claimants resorted to periodic violent self-enforcement. In all three cases the movement from de facto to de jure property rights led to potential or actual conflict because of insufficient government enforcement.property rights, Australia, Brazil, United States

Dams and disputes: water institutions in colonial New South Wales, Australia, 1850-1870

This paper will analyse the operation of the British common law of riparian rights in the Riverina District of New South Wales (NSW), Australia between 1850 and 1870. Theorists argue that the predisposition of people to fight over or cooperate to exploit valuable resources depends on how well property rights are defined and enforced.† The operation of the riparian doctrine in the Riverina provides an empirical, historical example of why inefficient property rights promote violence. Violence in this instance was based on collective action directed at the destruction of water supply infrastructure, specifically dams, constructed on various rivers within the Riverina. This paper considers why collective action in violence did not spill over into infrastructure construction. It is argued that the failure of collective action was due to its high costs stemming from several factors: failure to meet optimal group size; problems of free riders; hold-up concerns; and the introduction of a much disputed land policy in 1861 referred to as selection

De Facto and De Jure Property Rights: Land Settlement and Land Conflict on the Australian, Brazilian and U.S. Frontiers

We present a conceptual framework to better understand the interaction between settlement and the emergence of de facto property rights on frontiers prior to governments establishing and enforcing de jure property rights. In this framework, potential rents associated with more exclusivity drives “demand” for commons arrangements but demand is not a sufficient explanation; norms and politics matter. At some point enhanced scarcity will drive demand for more exclusivity beyond which can be sustained with commons arrangements. Claimants will therefore petition government for de jure property rights to their claims – formal titles. Land conflict will be minimal when governments supply property rights to first possessors. But, governments may not allocate de jure rights to these claimants because they face differing political constituencies. Moreover, governments may assign de jure rights but be unwilling to enforce the right. This generates potential or actual conflict over land depending on the violence potentials of de facto and de jure claimants. We examine land settlement and conflict on the frontiers of Australia, the U.S. and Brazil. We are interested in examining the emergence, sustainability, and collapse of commons arrangements in specific historical contexts. Our analysis indicates the emergence of de facto property rights arrangements will be relatively peaceful where claimants have reasons to organize collectively (Australia and the U.S.). The settlement process will be more prone to conflict when fewer collective activities are required. Consequently, claimants resort to periodic violent self-enforcement or third party enforcement (Brazil). In all three cases the movement from de facto to de jure property rights led to potential or actual conflict because of insufficient government enforcement.