1st Edition

Siren Song Chilean Water Law As a Model for International Reform

By Carl J. Bauer Copyright 2004

    Increasing scarcity, conflict, and environmental damage are critical features of the global water crisis. As governments, international organizations, NGOs, and corporations have tried to respond, Chilean water law has seemed an attractive alternative to older legislative and regulatory approaches. Boldly introduced in 1981, the Chilean model is the worlds leading example of a free market approach to water law, water rights, and water resource management. Despite more than a decade of international debate, however, a comprehensive, balanced account of the Chilean experience has been unavailable. Siren Song is an interdisciplinary analysis combining law, political economy, and geography. Carl Bauer places the Chilean model of water law in international context by reviewing the contemporary debate about water economics and policy reform. He follows with an account of the Chilean experience, drawing on primary and secondary sources in Spanish and English, including interviews with key people in Chile. He presents the debate about reforming the law after Chile‘s 1990 return to democratic government, as well as emerging views about how water markets have worked in practice. The resulting book provides insights about law, economics, and public policy within Chile and lessons for the countries around the world that are wrestling with the challenges of water policy reform.

    Preface Acknowledgments Introduction: The Chilean Water Model Comes of Age 1. The International Context: The Water Crisis and Debates about Water Policy Integrated Water Resources Management Perspectives on Water as an 'Economic Good' Economic Interpretations of the Fourth Dublin Principle Stretching the Neoclassical Paradigm: Institutional and Ecological Economics International Significance of the Chilean Model Water Markets and Water Policy in Other Countries 2. The Free-Market Model: Chile‘s 1981 Water Code The 1980 Constitution: Foundation of the Water Code 'Legislative History' and Political Background Chile‘s First Water Code (1951): Private Rights plus Strong Government Chile‘s Second Water Code (1967): Swinging Left to Centralized Control Water Rights after the 1973 Military Coup: Confusion and Neglect Neoliberal Leanings (1976-1981): Private Property and Free Markets The Final Version (1981): Compromise and Problems for Future Reform 3. Reforming the Reform? Policy Debate under Chilean Democracy Reforming the Water Code: Mucho Ruido, Pocas Nueces Round 1 (1990-1993): The Government Goes Too Far Alternative Instruments: Water Rights Taxes versus Fees for Nonuse Growing Emphasis on Economic Instruments and Analysis (1994-1995) An Aside: Chilean Environmental Law Round 2 (1996-2003): The Government Moderates Its Position The Opposition Hardens Constitutional Challenges of Fees for Nonuse D j Vu All Over Again? The Revival of Water Rights Taxes Pros and Cons of the Economic Instruments The Bottom Line 4. The Results of Chilean Water Markets: Empirical Research since 1990 The Overall Trend: From Partisan Boosters to Greater Balance Recent Chilean Overviews: Toward a Shared Diagnosis The Limar River Basin: Poster Child for Chilean Water Markets Issues Missing from the Research Chile‘s National Water Policy in the Late 1990s Missing Research Issue 1: Social Equity Missing Research Issue 2: River Basin Management Institutions f


    Carl Bauer is a fellow at Resources for the Future. He works in the areas of comparative water law, policy, and management in Latin America and the United States, with a focus on political economy and property rights. Bauer has been a lecturer and post-doctoral researcher in environmental studies at the University of California Berkeley, as well as a visiting professor and Fulbright Scholar at universities in Chile and Argentina. He has been a consultant for the United Nations, the Global Water Partnership, the World Bank, the Inter-American Development Bank, and other international organizations on matters of water rights, water markets, and economic instruments for water resources management. Bauer‘s previous book was Against the Current: Privatization, Water Markets, and the State in Chile, which has also been published in Spanish. His current research examines the impacts of electricity deregulation on river basin management in South America and tries to bridge the gap between lawyers, economists, and geographers in environmental regulation.

    'Timely . . . an impressive, in-depth understanding and thorough analysis of what has been happening in Chile and why.' Ken Conca, University of Maryland 'A valuable study. It highlights the global view of water issues and international water entities and emphasizes the importance of institutions first, then markets.' Charles W. Howe, University of Colorado at Boulder