Environmental Economics

EERC
Theme: Water Institutions and Sustainable Use EERC Working Paper Series: WIS-6

ENVIRONMENTAL ECONOMICS RESEARCH COMMITTEE

Environmental Degradation: Market, Institutional and Policy Failure

V Ratna Reddy Centre for Economic and Social Change, Hyderabad

MOEF

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IGIDR

WORLD BANK

ENVIRONMENTAL DEGRADATION: MARKET, INSTITUTIONAL AND POLICY FAILURE
(A Case of Water Resources in Andhra Pradesh)

V. Ratna Reddy Centre for Economic and Social Studies Nizamiah Observatory Campus, Begumpet, Hyderabad 500 016 Email: vratnareddy@vsnl.net vratnareddy@yahoo.com

Funded by The World Bank Aided “India: Environmental Management Capacity Building” Technical Assistance Project through Indira Gandhi Institute of Development Research (IGIDR), Mumbai. February 2002

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Contents

Acknowledgements List of Tables List of Figures Abstract Executive Summary CHAPTER I: CHAPTER II: Introduction Status of Water Resources in Andhra Pradesh

i iii vi 1 3 12 28 53 79 98 129

CHAPTER III: Ground Water: Epitome of Policy Failure CHAPTER IV: Surface Water: Institutional Imperatives CHAPTER V: Water Pollution: The Blind Spot CHAPTER VI: Degradation of Water Resources: Market, Institutional and Policy Failure References Appendix

141 150

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ACKNOWLEDGEMENTS Water is widely considered as a mismanaged and degraded resource. Theoretically, degradation of water resources is attributed to the market, institutional and policy failures. These dimensions are easy to visualise, as the linkages seem obvious, but hard to relate in reality. This study is an attempt to establish the linkages between market, institutional and policy failures in water resource management in real life situations. Specifically, this study attempts to provide some real life examples of market, institutional and policy failures in water resource management. More over, water is often studied from the economic angle where as our focus here is on the environmental dimension of water...