Against the Current: Privatization, Water Markets, and the State in Chile

In 1981 Chile's military government dictated a new Water Code that radically changed the country's previous water rights system by strengthening private property rights, favouring market incentives, and reducing state regulation. This book presents an empirical and interdisciplinary study of water markets in Chile, which is the leading international example of free market water policies. The book challenges the glowing reports given by neoliberals in Chile and the World Bank, showing that the results of this economic experiment have actually been rather mixed. Within the agricultural sector the Water Code has worked fairly well, although the market incentives to conserve water have been ineffective and water rights trading has been less active than expected. The Code's impact has been more negative at the level of river basins, where the institutional framework has revealed critical flaws in co-ordinating multiple water users and resolving conflicts. The book also combines law, political economy, and geography to analyze the disadvantages, problems, and wider contexts of water markets.