International incentives for economic efficiency in the Litani and Jordan Rivers

Abstract

Throughout human history, struggles over access and control of water resources have been a root cause of tension and armed conflict. In Near Eastern scheming for power, water is viewed as a strategic resource, quickly becoming the dominant resource issue. In the region straddling the Jordan valley, the flashpoint of Arab-Israeli disputes, water shortages are acute and laden with emotive conflictual tones. This is exacerbated by the lack of a mechanism short of war or external governance for allocating the resource. Yet, the emotions associated with water use in the Near East are easily warranted from the several national interests reflected along the Litani-Jordan system of basins.

This study combines a test of methodology with an institutionally based developmental framework for agreement. The test of methodology numerically illustrates benefits of integrated water development by computing efficiency gains, whereas the institutional framework for development applies to the specific Near East conditions. This study proposes to evaluate the potential welfare under constrained conditions with respect to various efficiency and equity levels, then compare them with welfare actually achieved under current conditions. The difference is the efficiency gain providing the economic incentive for change. Thus it evaluates the existential gap in the Litani-Jordan system.

The end of the cold war and the effort to promote peace between Israel and its neighbors set the stage to clearly define a long-term strategy for water development in the Litani-Jordan system. A strategy based on efficiency gains would facilitate improved equity and enhance the potential to reinforce the peace process. Increased economic efficiency based on integrated development may settle some of the most conflictual issues of the region through a rational and equitable foundation of incentives and institutions.

As a result, all parties can gain from the proposed development due partly to integrated management and use. The economic gains are not proportional among the various countries. However, gains constitute an economic incentive that may be sufficient to motivate political actors away from historical and current practices of resource allocation based on military might.