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Political science

Political theory

Relevance of political science to international water conflict is found in several aspects of the field. The first is the purely theoretical aspect. The Functionalist Theory of International Politics, an alternative to the fairly self-explanatory Power Politics, claims that states will willingly transfer sovereignty over matters of public concern to a common authority (Mitrany 1975, as cited in Lowi 1990). Cooperation over resources, then, may induce cooperation over other, more contentious and emotional, issues. In hydrologic terms, this might be justification for the viability of river commissions and the claim that they are useful even among hostile neighbours. The Realist critics of Functionalism respond that states that are antagonists in the "high politics" of war and diplomacy tend not to be able to cooperate in the realm of "low politics" of economics and welfare. Lowi (1990) concludes in favour of the Realists on the question of Middle East hydropolitics, suggesting that, until larger issues of recognition and refugees are settled, cooperation on water management would be futile.

The theoretical approach tends to view politics as a passing wave, the forces of which can be analysed and, if one is skilful, perhaps the impacts of which can be predicted. Other approaches tend to take a more deterministic view, as, for example, the branches of institutional and policy analysis, and of international relations. If there is conflict, perhaps either the institutions that make policy or the policy itself may be flawed, and competent analysis will reveal methods for improvement. In the international arena, one should also investigate the likelihood, or even the advisability, of increased cooperation.

Institutional and policy analysis

Several authors approach water conflicts from this angle. Lynne et al. (1990) describe how scarcity can lead to potential conflict between water institutions and the people they serve. Ingram et al. (1984) offer guidelines for effective implementation of water policy.

Among those dealing with Middle East water scarcity, however, the question is occasionally asked "How does one translate the static and dynamic hydrologic realities of the Middle East into terms that the affected populations can understand?" The question is a conceptual one, based on the premise that any political process must ultimately be understood by the people affected by it.

In the context of Middle East hydropolitics, it is probably more important to investigate the validity of the premise: that is, for whom it is really important to "take possession of the issue," before tackling the larger issue of how it should be done. This section presents a discussion of the salience of water in general, and an investigation of the interests and power of different populations within each political entity, notably Israel and Jordan, affected by the water conflict. For simplicity these groups are divided into (a) domestic and industrial water users, (b) agricultural users, (c) technical implementers of policy, and (d) policy makers, and interests of each are assumed to be similar on both sides of the Jordan River.

In Naff and Matson (1984), the most thorough examination of regional hydropolitics to date, each actor in the Jordan River conflict Lebanon, Syria, Jordan, and Israel - is analysed according to its respective "riparian position," "power," and "interest." This approach seems to be based on some derivation of Coplin and O'Leary's (1976) PRINCE method's categories of "issue position," "power," and "salience" for political analysis. Whether described as "interests" (Naff and Matson 1984), or "motivations" (Meltsner 1972), it is clear that the aspects referred to here as "salience" - "the importance each political actor attaches to the particular issue" (Coplin and O'Leary 1976) and "power" - whether legal, political, riparian position, or military- are crucial to political analysis. The "issue" is assumed to be, "where can (or should) water policy emphasis be placed?"


Every person is a member of this category over and above any other category. Domestic water consumption includes primarily the requirements for each individual's biology, but also other needs around the house, including water for hygiene, cooking, dishwashing, and lawns. The salience of water for domestic consumption depends on the use to which it will be put.

As mentioned earlier, Maslow (1954) categorizes and ranks basic human needs to their level of motivating behaviour. From "inner" to "outer," these are physiological needs, safety needs, belongingness and love, esteem, and self-actualization. Water for biological needs would clearly be a most basic human need, with other domestic uses varying in importance.

One conclusion that might be drawn, then, is that water is (or should be) a highly salient issue for the entire Middle East population. Before jumping to policy conclusions, however, one should recognize not only that water for domestic consumption is a comparatively small portion of the total water budget for each country from 10 per cent in Jordan to 22 per cent in Israel (Poster 1989b) but also that the region already has among the lowest per capita consumption rates in any arid area (Falkenmark 1989b).

Moreover, even with a high degree of "salience," domestic consumers cannot significantly affect a country's water budget. This is particularly true, given the price inelasticity of water for personal use. Darr et al. (1976) suggest that, in Israel, consumption is more a function of factors such as geographic location and family size, than it is of price. Policy makers looking to increase political flexibility by decreasing demand would be hard pressed to find meaningful cuts in the domestic sector.

In contrast, industrial users account for a minor portion of each entity's water budget - from close to 0 per cent in the West Bank and Gaza to 5 per cent in Israel and Jordan - but have little influence in water decision-making. In the recent drought, price increases were levied most against the industrial sector, even though several analysts, including those within the Israeli Water Commission, advocated a shift of water resources from agriculture to industry because of the relatively higher contribution to the GNP of the latter per unit of water.


The vast majority of Middle East water (73 per cent in Israel to 85 per cent in Jordan) is used in the agricultural sector. Water for agriculture for one's own population might be categorized in Maslow's terms (Maslow 1954) as "physiological needs" the most basic type. Even though water for agricultural export may be less crucial to survival, agriculturalists certainly have a vested interest in portraying all agriculture in terms of "food security."

The Israeli agricultural sector gains relevance through its ties to settlements and, in turn, to security. Settlements on the Golan Heights, for example, are viewed as more than a source of agricultural production: they are also outposts, the presence of which creates a kind of first line of defence against the Syrians, whom Israelis view as the likely antagonist in a subsequent war.

The high degree of salience of agriculture, the high volume of water in question, and the political power of agriculturalists, probably give the agricultural sector more impact on national water policy than any other. The same national water ethics that give agriculture great economic influence in the region, also give it great political influence. The Water Commission in Israel, the ultimate authority for all water planning and operations in a country where all water is nationalized, is under the authority of the Ministry of Agriculture. In Jordan, the Water Minister is a cabinet-level position, and the primary responsibility of the Jordan Valley Authority is to the farmers in that region. Any cuts to this sector in both Israel and Jordan, even during the 1988-1990 drought, came only after heated political debate.


This group, the technological talent to assess and monitor the resource base, is made up of, in effect, the hydrologic "keepers of the flame" of water policy. Policy makers rely on this group of hydrologists, hydrogeologists, engineers, chemists, and economists to implement national policy within the limits imposed by

  1. normal seasonal and annual variability,
  2. dramatic fluctuations (droughts and floods),
  3. groundwater pumping and recharge within "safe yield,"
  4. delivery system capability,
  5. adequate water quality for each use, and
  6. economic efficiency.

Agriculturalists and domestic users, similarly, count on this group to guarantee that, when a tap is opened, adequate, clean water comes out.

By definition, this group has a high degree of salience and knowledge of water issues but also, interestingly, has been the group most amenable to compromise in the international arena, even without formal power, Scientists on all sides, though constrained by political forces, do have access to each other through scientific journals and international conferences, Possibly as a consequence, along with the tangible nature of water science (as opposed to water politics), technical implementers have found agreement, notably in the 1953-1955 Johnston negotiations over Jordan River allocations, and 19671969 planning for nuclear "agro-industrial complexes." Both plans collapsed when the technical committees sent their recommendations to the political level.

This group, however knowledgeable and indispensable, seems often to be taken for granted, particularly by policy makers, for whom water is not adequately emotionally charged to take advantage of politically. The question posed might be restated, then, rather than as, "How to increase salience of water on the part of the population?" as the alternative, and probably more relevant, "How to increase the salience of technical realities on the part of the policy makers?"

One example of such synergy between the two groups can also be gleaned from the Johnston negotiations, which, in 1953 were deadlocked when, according to Wishart (1990), an engineering study was completed that suggested that larger areas of Jordan could be irrigated with less water than was thought. This allowed the manoeuvrability that led to the negotiations' (limited) success.


Policy makers receive pressure for policy from the bottom up - that is, from the sectors described above. Domestic users want adequate water "no matter what," and can suggest as much with their votes. It is an interesting contradiction that, salient though water is for survival, it is difficult to picture one actually voting for a "water platform" or the "hydrologic party." Perhaps a new term, such as "unconscious high salience," with its seeming contradiction, would be useful.

Agricultural users have greater water needs, and corresponding political influence. Policy makers incorporate these pressures with the advice of technicians to develop national and international policy, the impacts of which are then felt from the top down.


Water is more or less salient to all segments of the Middle East population depending, in large part, on whether there is ample supply to accommodate demand. For example, water was a more common subject, from boundary disputes to government information packets, until the 1967 war, when hydrologic allocations shifted with political borders. In recent years, the highest salience has been among agricultural users and technical implementers, although occasional droughts induce awareness on the part of domestic consumers, and policy makers as well.

The interests of each group are summarized as follows:

  1. Domestic and industrial consumers. Want an adequate, clean water supply as a matter of course. Large population and therefore high power; small percentage of consumption; "unconscious high salience."
  2. Agricultural consumers. Seek constant supply regardless of annual fluctuations. Small population but high power; large consumer; protective of hydrologic status quo. Increasing investment in technology.
  3. Technical implementers of policy. Responsible for accommodation of needs of domestic and agricultural sectors. Constrained nationally by hydrologic limits and fluctuations, internationally by political considerations. Willing to seek technical solutions. Low power, high salience.
  4. Policy makers. Responsive to needs of all, but constrained by competing demands. Low salience, except during international crises or years of drought.

These interests suggest the following guidelines for internal policy:

  1. It is not crucial that the general public "take possession" of the issue of water, except to do what they can to conserve in the home.
  2. Agricultural users have more political influence, given their vested interests in a status quo, than may be desirable for effective policy.
  3. The single most important link, and therefore the one that should be strengthened, is that between technical implementers and policy makers, for both national and international policy.

The technical steps that might be taken to increase water supply or decrease demand were investigated earlier. The summary above does suggest, however, that in making sure that policy is a reasonable reflection of the hydrologic realities, the most vital step that might be taken in both Israel and Jordan is the removal of responsibility for these policies from its current place in the heart of agricultural and political pressures.

In Israel, for example, this might mean shifting water-policymaking from the Agricultural Ministry to a body less susceptible to constituent interests - perhaps the Ministry of the Environment, as Galnoor (1978) has suggested. An advisory body might then be established, led by technical implementers with input from the other sectors, which could more easily implement the necessary technical and economic policies, within the confines of fluctuating hydrologic limits. A similar framework might work in the institutional hierarchy of Jordanian government.

International relations

Water policy in this region is at present drawn up within the boundaries of a nation, rather than within those of a watershed. Because the flow of water does not respect the political boundaries, it should be clear that regional management, at the watershed level at least, would be a much more efficient approach. In fact, the only point on which the water policy analyses surveyed earlier do agree is on the need for planned water sharing and joint water development, as Eric Johnston envisioned 35 years ago.

Regional cooperation would open the door to a host of new water distribution alternatives. For example, surface water from the Yarmuk or the upper Jordan could be provided to the West Bank, allowing increased development in that area while alleviating Israeli fears of overpumped Palestinian wells. Alternatively, Israel and Jordan might cooperatively develop both banks of the Jordan, eliminating the current redundant costs of separate delivery systems within each country. In addition, the larger the region cooperating, the more efficient a regional plan can be developed. It is cheaper, for example, to bring water from the Nile to the Negev than it is to pump it from the Sea of Galilee, as is the current practice (Kelly 1989, 305).

It has been argued that one need not wait for the cessation of hostilities before developing such water-sharing plans:

A regional water plan need not await the achievement of peace. To the contrary, its preparation, before a comprehensive peace settlement is attained, could help clarify objectives to be aimed for in achieving peace. (H. BenShahar in Fishelson 1989, 7)

It should be clear that any dreams of regional cooperation in the Middle East run at least the same dangers of confronting issues of deep national emotion as do public policy solutions - probably even more. Listing all the reasons why regional cooperation may not work in the Middle East is certainly well beyond the scope of this work. However, one question is particularly relevant to the proposal of joint water projects, and deserves mention.

Elisha Kally (in Fishelson 1989, 325) contends that "the successful implementation of cooperative projects ... will strengthen and stabilize peace." This concept of inducing increasing integration, even between actors with some hostility, is also a strategy employed in the United States by the US Army Corps of Engineers (interview, Jerry Delli Priscoli, June 1992), and recommended for international settings by their representatives.

As the regional politics increase the political viability of some of these international projects, we might re-examine whether greater interdependence is actually an impetus to greater cooperation or is, in fact, the opposite, leading to greater conflict.

Many of the hostilities that have occurred in the region over water seem to have come about precisely because the water destined for a downstream user was controlled by an upstream party. Many "cooperative" projects might only provide additional opportunity for suspicion and potential for contention. Lowi (1990) suggests that issues of regional water sharing can not be successfully broached in the Jordan basin until the larger political issues of territory and refugees are resolved.

One point where contention seems most likely to develop is over control of a major source of water. Many proposed water transfers, such as the Egyptian offer of Nile water to Israel, have fallen through partly because of concern for whose hand is "on the tap." Tensions were raised immediately before the Gulf War when Turkey closed off the Euphrates River for one month to fill its Ataturk Dam. Some of the greatest resistance to the Johnston proposals was encountered whenever an aspect of the plan called for relinquished control by any of the parties, such as joint storage in the Sea of Galilee or an international Water Master. G. White and co-workers (in Glassner 1983, 491) suggest that, in many group situations, water users prefer private to communal water sources if there is a choice, "to avoid situations where there is risk of irritating confrontation."

I recognize the advisability of striving towards ever-increasing integration between political entities. As has been pointed out, "lasting peace among nations is characterized by a broadly based network of relations" (H. BenShahar in Fishelson 1989,1). I suggest, however, that for resource conflicts in general and for water conflicts in particular, an initial condition that should be met is that each entity has adequate control of an equitable portion of its primary source. Past and present grievances need to be addressed before embarking on projects of cooperation or integration. For water projects, this would involve (a) assigning property rights to existing resources, (b) guaranteeing control of a water source adequate to meet future needs, and (c) addressing the issue of equity within the design of any project for cooperative development.

The fact that projects would have to be weighed in terms of the conflictalleviating tendencies of more efficient water distribution, as opposed to the possible conflict heightening of greater hydrologic interdependence, should not be a reason to abandon the concept. Nor, by any means, should the concept of regional planning be tarnished because of uncertainty about specific projects. Rather, in planning for watershed development and in designing transnational water projects, the ultimate goal might yet be ever-increasing integration. In the initial stages, however, the reluctance by parties to relinquish control of a resource as vital as water should be addressed and might even be incorporated in the project design. This issue of "control" and cooperationinducing project design is taken up again later in this chapter and in chapter 4.


Economics, with the individual as a rational maximizer of satisfaction in a world of relative scarcity, offers a useful paradigm for water conflict analysis. When deciding between several possible water development options, for example, the benefit-cost analysis - an economic tool by which all of the future benefits and costs of a project are reduced to a single amount representing the net benefits in current monetary units - can help one to determine which project would be the most beneficial.

Economic theory also provides guidelines for policy options for efficient water distribution. Economic theory argues, for example, that only when the price paid for a commodity is a reasonable reflection of the true cost, can market forces work for efficient distribution of the commodity. In the Middle East, as elsewhere, the cost of water to the user is highly subsidized, especially water earmarked for agriculture. The true cost of water would reflect all of the resource development, pumping, treatment, and delivery costs of that water, most of which are not passed on to the user. In Israel alone, 20 per cent of the country's energy is used solely to move water from one place to another (Naff and Matson 1984, 12).

Subsidized water, it is argued, leads to waste in agricultural practices, to too little incentive for research and development of conservation techniques and practice, and finally, to too much water being allocated to the agricultural sector as opposed to industry. Take away subsidies and allow the price to rise, and market incentives are created for both greater efficiency on the farm and a natural shift of water resources from the agricultural sector to industry, where contribution to gross natural product per unit of water is often much higher. Since, in each of the areas discussed, between 75 and 95 per cent of water use is allocated for agriculture, the savings in water could be substantial (Wishart 1990). Thomas Naff has recommended such a shift of between 35 and 40 per cent of agricultural water in both Israel and Jordan (lecture, University of Wisconsin-Madison, March 1990).

If the price of water reflects the true costs of its development, and if property rights to water are clear, then a "water market" can be established to allow buying and selling, ensuring, through the "invisible hand" of the market-place, that each unit of water is being used most efficiently. Water markets, whether national or international, can provide clear incentives for efficient use and guidelines for trades or transfers. Howe and Easter (1971) derived the necessary conditions for economically efficient interbasin water transfers in the United States, and Dinar and Wolf (1992) discussed international water markets using a hypothetical transfer from the Nile to the Jordan basin as a casestudy. Zeitouni et al. (1992) discussed trading water rights in an international context and Gonzalez and Rubio (1992) showed that the amount of water to be transferred between basins in a Spanish case could be reduced if economic factors were considered, as opposed to straight extrapolations of need.

Economic analysis may also create a framework for easing regional water tensions. According to Wishart (1990), "conflicts over water rights are easier to resolve if transaction costs of resolution are lower, and if opportunities exist for improving the efficiency of water use and discovery." In other words, if it is cheaper for people to cooperate and save water than it is to fight, they would rather cooperate.

Some other considerations that have been used in the past to enhance the potential for economic cooperation between players include the following:

  1. Recognizing that, while water itself is a finite commodity, and therefore conducive only to zero-sum solutions ("distributive" or "win-lose," in the language of ADR), the benefit, or welfare, derived from water is variable and therefore traceable for non-zerosum ("integrative" or "win-win") solutions.
  2. Welfare can be measured basin-wide and among all the players participating in cooperation, so that even when one player's individual welfare is not immediately enhanced by the loss of the resource, the resulting pay-offs of trade should result in the region as a whole being better off.
  3. Infrastructure considerations can enhance the argument for cooperation, especially when considering the variable aspects inherent to water resources. One or another of the players may have better resources to deal with fluctuating quantity or quality more storage potential, or better-developed water treatment, for example which can help encourage an alliance.

There are, however, problems inherent to using economic theory as the tool for water conflict analysis - problems that can lead to weaknesses in the economic solutions prescribed. For one, water is not a pure economic good. Options to the consumer of most goods include migrating to where it is cheaper or abstaining from it altogether if the price is too high. Given small countries with contentious borders, migration to water sources is not a viable alternative, nor, for more obvious biological reasons, is abstaining. Presumably, however, the analysis is restricted to water for agriculture, where there is ample room for reducing demand before running into such limits.

Another problem with economic analysis is more serious because it has to do with a force much more fundamental than economic theory - that is, the emotions of a nation. As mentioned earlier, all of the countries in the area were built from the farm up, and the agriculturalist, whether the fellah or the kibbutznik, holds a special mystique on both sides of the Jordan. Both Arabic and Hebrew ideologies are rife with slogans of "making the desert bloom" and "nations rooted in their land." In this context, water invariably becomes the "life blood" of a nation. One result of this has been a certain leeway granted to agriculture in the area, both political, as noted previously, and economic.

One striking example of water "diseconomy" is the case of Israeli settlements on the Golan Heights. The 24, mostly agricultural, settlements of the Golan have a population of about 3,500. In 1980, approximately 80 per cent of the 50 MCM/yr used by these settlements was pumped up from Lake Kinneret - a height differential of 600 m (Davis et al. 1980, 27; Inbar and Maos 1984, 22). Each cubic metre of water weighs a metric ton. Were the settlers to include the costs of the energy required to lift that much water that high, their crops could not possibly be competitive in the market-place. But settlements on the Golan Heights are viewed as more than a source of agricultural production: as mentioned earlier, they are also outposts, the presence of which creates a kind of first line of defence against the Syrians, whom many Israelis view as the likely antagonist in an ensuing war.

This perceived connection between settlements and security holds true throughout the country. As Frey and Naff (1985) write,

Israeli agriculture is not merely an ordinary economic sector. It is linked to the crucial matter of settlements, and settlements are linked to defense and national security.

This, then, is what makes Golan cotton competitive in the eyes of the nation.

Overlooking this fundamental aspect of a "national water ethic" of any of the countries involved, can occasionally confound an economist, especially one from outside the region. Cal Burwell, once the Director of Research for the proposed Agro-lndustrial Complex, mentioned recently that "Some of what's valuable to the folks over there just doesn't fit into what our folks would call 'good economics"' (interview, February 1990).

The economist increasingly recognizes the sometimes overpowering noneconomic values that water users occasionally attribute to their water. These might include (from Wolf 1992a):

  1. Political attributes of water, e.g. perceived past injustice, national pride;
  2. Cooperation per se (e.g. the World Bank does not include international cooperation as a benefit in benefit-cost analyses (Olivares 1986);
  3. Physical security;
  4. Perceptions of beauty in the environment;
  5. "The Land Ethic" inherent value of "non-economic species";
  6. Food or water security - the psychological value of control;
  7. Open space.

This last represents a departure from historic economic arguments in the Middle East. In Israel, for example, water has been subsidized for years as a means of promoting population dispersion and food security. These subsidies have dwindled somewhat in recent years, as the Ministry of Agriculture has accepted more of a market approach. Lately, however, as the population soars with natural growth and extensive immigration, the suggestion has been made to increase subsidies once again as a way to keep open space among the extensive developments (interview, Martin Sherman, November 1991).

Additional factors often convolute the possibility for a traditional economic analysis, particularly in an international setting. Some of these possible political and institutional constraints to economic cooperation are as follows:

  1. Some level of hostility between the players. Hostility can be between basins (e.g. northern and southern California), between economic sectors (urban versus agricultural users), or, especially, between political entities (e.g. the Turkish Peace Pipeline, Akdogan 1992; Nile water transfer, Dinar and Wolf 1992).
  2. Property rights (ownership of water) are often unclear and, occa signally, bitterly contested. Although water is internally nationalized in all of the cases discussed in this work, international ownership is often unspecified.
  3. State-subsidized water often makes the economics of any transfer or trade unclear, as described above.
  4. National prestige can be tied up in the population's perception of its water resources, decreasing the apparent desirability of cooperation. National pride in "Israeli oranges," or "Egyptian cotton," for example, may preclude a shift to other agriculture or industry, even if the product in question can be imported at less expense from abroad.
  5. Usually, when an inter-basin or international exchange is agreed upon' it is for one specific amount to be delivered annually. Because of treaty or infrastructure limitations (such as pumping, storage, or delivery capacity), the "solution" is discrete and cannot be arrived at dynamically. This limits the potential for efficient water market transactions, which often rely on variable solutions (e.g. Lekakis and Giannias 1992; Zeitouni et al. 1992).
  6. Insulation. Negotiating teams usually include diplomats and engineers. The primary considerations are therefore often of politics and reliable delivery, rather than being influenced by economic efficiency.

Even while recognizing its limits, one can still use economic analy sis as a useful tool to provide some guidelines to increase hydrologic efficiency. It has been suggested that following these guidelines can be especially crucial, particularly as water limits begin to be reached:

Whereas diseconomies dictated by ideology could be tolerated under condi tions of conventional water sufficiency, they cannot continue indefinitely, especially with regard to investments under conditions of system's short age. (Galnoor 1987)

Game theory

Game theory, like economics, assumes enlightened self-interest and "rational behaviour." A quantitative analysis can be performed to show how n number of players should react to a competitive setting in order to "win." A rational outcome is defined by an equilibrium point ("pareto-optimality" to economists), where no player can gain by unilaterally moving away from that point.

Game theory has been applied to a variety of issues as diverse as national security, social justice, and the existence of superior beings, but it has been applied to international water conflicts only sporadically. Rogers (1969) analyses conflicting interests along the Lower Ganges and suggests strategies for cooperation between India and Pakistan. Dufournaud (1982) applies game theory to both the Columbia and the Lower Mekong to show that "mutual benefit" is not always the most efficient criterion to measure cooperative river basins. Dinar and Wolf (1992) use cooperative game theory to explore the economic pay-offs that might be generated in a technology-for-water exchange between Israel and Egypt, and how those payoffs might be distributed to induce cooperation.

As political science asks, "Does cooperation beget cooperation?," game theory poses, somewhat less didactically, the question "What is the correlation between cooperation and efficiency?" In theory, according to R. Axelrod, a player who in an opening move acts generously and on a responding move acts cooperatively, never initiating attack, will outscore any other strategy, given time and averaging. (Cited in Painter 1988)

In practice between competing nations, however, a strong positive relationship exists between tendencies to initiate and to receive international conflict. The correlation between cooperative initiation and receptive tendencies, however, is much weaker. (Platter and Mayer 1989)

Either game theory has not yet developed to the point where it can adequately model complex international decision-making, or the nations surveyed had neither the time nor the faith in time and averaging to pursue "efficiency."

Nevertheless, game theory offers a framework for some level of analysis for water conflict. When the water demand of a population in a water basin begins to approach its supply, for example, the inhabitants have two choices that can be modelled (see Falkenmark [1989a] and LeMarquand [1977] for related work):

  1. They can work unilaterally within the basin (or state) to increase supply through waste-water reclamation, desalination, or increasing catchment or storage - or decrease demand, through conservation or greater efficiency in agricultural practices.
  2. They can cooperate with the inhabitants of other basins for a more efficient distribution of water resources. This usually involves a transfer of water from the basin with greater resources.

These options are equally true for the inhabitants of a single basin that includes two or more political entities. A third option exists, of course, and is practiced most often in arid countries that are less developed or are racked by military strife: they can make no changes in planning or infrastructure and face each cycle of drought with increasing hardship. Since the most reasonable prescriptions in such a case are usually beyond game theory modelling, this case is not considered further.

For the game theorist, this dichotomy between two parties of whether to work unilaterally (defect) or to cooperate is recognizable as a familiar two-player, two-strategy game (Rogers [1978] discusses game theoretical aspects of water resources). The strategies chosen by each player often depend on the geopolitical relationship between them. For two water basins within the same political entity, with clear water rights and a strong government interest, the game may resemble a "stag hunt," where mutual cooperation is the rational strategy.

Between somewhat hostile players, either within a state but more often internationally, the game becomes a "prisoner's dilemma," where, in the absence of strong incentives to cooperate, each player's individual self-interest suggests defection as the rational approach. In cases of high levels of hostility, a game of "chicken" can develop, with each player competing to divert or degrade the greatest amount of water, before the opponent can do the same.

As the amount of water surplus decreases over time, however, the impetus towards conflict or cooperation (pay-offs) might change, depending on such political factors as relative power, level of hostility, legal arrangements, and form and stability of government.

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