World Bank Report: Conflict and cooperation in managing international water resources

Water is often not confined within territorial boundaries so conflicts may arise about shared water resources. When such boundaries lie within a federal state, conflicts may be peacefully and efficiently resolved under law, and if the state fail to reach an agreement, the federal government may impose one. Similar international conflicts are more difficult to resolve because no third party has the authority to enforce an agreement among national states, let alone impose one. Such international agreements must be self-enforcing. Efficient outcomes may emerge, but are not guaranteed. International law may emphasize the doctrine of"equitable utilization"of water resources, but there is no clear definition of what this implies. In the Colorado River case, the polluter (the United States) agreed to pay for all the costs of providing the downstream neighbor (Mexico) with clean water. In the Rhine River case, the downstream country (the Netherlands) agreed to pay part - but not all - of the costs of cleanup. In Colombia River Treaty case, both parties agreed to incur construction costs on their side of the border and share evenly the gross (not the net) benefit. This division may well have yielded a smaller net benefit to the United States than unilateral development would have, but the United States ratified the treaty. Negotiated outcomes need not to maximize net benefits for all countries.