The success of Australia's water markets is now well documented and confirms the hypothesised usefulness of water markets as a policy tool, at least in the context of places like the Murray–Darling Basin. In this article, we reflect on the theoretical benefits of water markets as a point of reference against which to scrutinise the current penchant of government to subsidise irrigation infrastructure in efforts to address over-allocation. We conclude that this approach results in a serious contradiction, unless there are grounds for believing that government has insights into the dynamic efficiency of the irrigation industry that exceed the coordination power of the market.
|Number of pages||7|
|Journal||Economic Papers: a journal of applied economics and policy|
|Publication status||Published - 2013|
Crase, L., Pawsey, N., & O'Keefe, S. (2013). A note on contradictions in Australian Water Policy. Economic Papers: a journal of applied economics and policy, 32(3), 353-359. https://doi.org/10.1111/1759-3441.12037