Table Of ContentWesleyan University The Honors College
The Evolution of Water Law Toward the Efficient
Allocation of Water Rights:
An Analysis of England and California
by
Evan Hazelett
Class of 2013
A thesis submitted to the
faculty of Wesleyan University
in partial fulfillment of the requirements for the
Degree of Bachelor of Arts
with Departmental Honors in Economics
Middletown, Connecticut April, 2013
For
my
friends,
who
make
me
laugh.
For
mom
and
Peter,
who
always
support
me
to
the
fullest.
For
my
brother,
who
knows
me
best.
And
for
my
father,
I
miss
you.
Together,
we
become
better
people.
Contents
CONTENTS
i
INTRODUCTION
1
CHAPTER
1
Introduction
15
Introducing
the
Economics
of
Water
Law
16
Some
Basic
Considerations
16
Farmers
and
Water:
A
Few
Simplified
Examples
18
Desirable
Outcomes:
Efficiency
and
Distributional
Welfare
25
The
Application
of
Governance
Structures
27
Transaction
Costs
in
Theory
33
Bargaining
for
Rights
in
a
World
Without
Transaction
Costs
34
Bargaining
for
Rights
in
a
World
Full
of
Transaction
Costs
48
Conclusion
56
CHAPTER
2
Introduction
59
Governance
Through
the
Ancient
Use
Doctrine
63
A
Brief
Discussion
of
the
Relevant
Conditions
63
What
the
Ancient
Use
Doctrine
Is
and
How
It
Can
Be
Applied
67
Russell
v.
Handford
69
Luttrel’s
Case
76
Sury
v.
Pigot:
Doctrinal
Shifts
78
Governance
Through
the
First
Occupancy
Doctrine
83
The
Influence
of
Economic
Growth
and
William
Blackstone
83
How
First
Occupancy
Differed
from
the
Ancient
Use
Doctrine
87
Bealey
v.
Shaw
88
Additional
Clarifications
and
Considerations
92
Governance
Through
the
Rule
of
Reasonable
Use
95
The
Conditions
That
Necessitated
a
New
Rule
95
Embrey
v.
Owen
97
Conclusion
103
-‐i-‐
CHAPTER
3
Introduction
106
Nineteenth
Century
California
Water
Law
110
An
Overview
of
Early
California
Water
Rights
110
Growing
Importance
of
Prior
Appropriation
114
Limitations
on
Prior
Appropriation
116
The
Gold
Rush:
The
Birth
of
Prior
Appropriation
122
The
Conditions
That
Necessitated
A
New
Rule
122
Riparian-‐Appropriator
Conflict:
The
Case
of
William
Ware
127
A
Distributional
Argument,
Perhaps?
129
Growing
Conflict:
Prior
Appropriation
v.
Riparian
Rights
134
Applying
Rules
Differentially
134
Lux
v.
Haggin
136
Continuing
Conflict
138
A
Model
For
Determining
the
Efficiency
of
Rulings
142
Conclusion
151
CHAPTER
4
Introduction
154
The
Importance
of
Administrative
Oversight
of
Water
Rights
157
The
Appropriative
Water
Right
157
The
Alternatives
160
Reasonable
Use
160
Decentralized
System
of
Appropriative
Permitting
167
Article
X,
Section
2
168
Joslin
v.
MMWD
170
Should
the
Government
Be
Involved
At
All?
177
IID
v.
SWRCB
181
The
Public
Trust
Doctrine
and
Environmental
Regulation
187
National
Audubon
Society
v.
Superior
Court
189
The
Public
Trust
Doctrine
and
Distributional
Welfare
195
A
Final
Thought
197
The
Importance
of
Transfers
199
MID
and
USBR
202
Two
Final
Provisions
of
Transfer
Law
206
-‐ii-‐
Conclusion
208
CONCLUSION
210
BIBLIOGRAPHY
224
-‐iii-‐
Introduction
Water
is
the
resource
of
life.
Its
significance
to
us
as
organic
beings
is
paramount.
It
pervades
everything
we
are
and
everything
we
do.
Water
is
in
our
drink,
it
is
in
our
food,
and
it
comprises
the
majority
of
our
body
mass.
Water
is
in
our
clothes,
it
is
in
the
wood
used
to
construct
our
homes,
it
is
in
the
earth
we
walk
upon
every
day,
and
it
permeates
the
atmosphere
and
the
air
we
breathe.
Without
food,
humans
can
survive
for
up
to
a
month;
without
water,
we
die
in
a
matter
of
days.
Such
a
delicate
and
simple
body
of
molecules,
water
is
so
transparent
and
pure,
so
omnipresent,
so
tangible
and
yet
so
fleeting,
and
so
astronomically
important
for
life
as
we
know
it.
Water,
the
fluid
that
pours
out
of
holes
in
the
ground
and
into
our
mouths
at
the
push
of
a
button.
We
have
found
ways
to
master
the
provision
of
water,
and
yet
still
water
masters
us.
With
it,
we
are
whole.
Without
it,
we
are
lost.
The
thought
is
humbling.
It
brings
us
back
to
our
roots,
to
a
place
where
we
are
not
but
flesh
and
blood.
It
is
truly
a
fragile
existence
we
lead,
an
animal
existence,
wholly
dependent
upon
the
materials
and
the
nutrients
of
the
earth.
Water’s
role
as
the
resource
of
life
has
been,
and
still
is,
reflected
in
custom,
religion,
and
social
order.
Its
existence
has
been
raised
to
the
level
of
divinity,
and
its
uses
have
been
central
to
the
social
fabric
of
societies.
Yet
while
-‐1-‐
water
has
often
existed
as
a
public
good,
a
natural
resource,
free
to
all,
it
also
has
a
substantial
history
of
privatization
and
management.
This
dual
character
of
water
as
a
free,
public
good
by
right,
gifted
by
the
divines,
as
well
as
a
privately
owned,
managed
resource
predates
modern
society.
Water’s
dual
nature
was
not
lost
on
our
predecessors,
whose
ancient
rules
and
customs
pertaining
to
water
still
dominate
traditional
societies
today.
Whether
for
communities
governed
by
traditional
Jewish
water
law,
traditional
Islamic
water
law,
Zimbabwean
indigenous
water
law,
Bihar
Indian
water
law,
or
Australian
aboriginal
water
law,
water
was
and
still
is
a
centerpiece
of
the
community
and
social
relations.
It
connected
everyone
through
a
shared
spiritual
and
social
identity.
It
was
a
gift
of
divine
beneficence,
a
human
right
shared
by
all.
At
the
same
time,
because
of
scarcity,
water
was
managed
by
these
traditional
water
laws,
which
governed
ownership
of
water
holes,
wells,
and
sharing
procedures.
Still,
anyone
in
need
could
at
almost
any
time
attain
access
to
someone
else’s
water
source
simply
by
asking
(Salzman,
p.
6-‐10).
This
balance
between
understanding
water
as
a
human
right
and
public
good
and
as
a
tradable
and
manageable
resource
is
a
dilemma
these
traditional
societies
grappled
with.
Water
also
dominated
social
relations
in
Ancient
Rome,
and
its
provision
was
an
important
economic
and
political
puzzle
that
much
time,
money,
and
effort
was
spent
tackling.
The
Roman
aqueducts
are
one
of
the
most
amazing
infrastructural
feats
of
that
era.
More
than
that,
they
stand
as
a
symbol
of
the
magnificent
importance
of
water,
past,
present,
and
future.
These
great
-‐2-‐
structures
brought
water
into
the
city
for
three
uses:
public
use
in
the
lacus,
the
public
basins,
which
was
a
free
service;
private
use,
supplied
by
a
private
pipe
service,
for
which
one
had
to
pay
a
special
tax,
a
vectigal;
and
the
bath
houses,
which
were
indoor,
public
bathing
pools
(Salzman,
p.
11-‐15).
Both
the
bath
houses
and
the
lacus
were
utilized
as
communal
meeting
places.
Water
was
a
central
driver
of
social
engagement,
and
it
permeated
one’s
daily
activities.
This
society,
too,
tried
to
maintain
the
balance
between
water
as
a
free
public
good
and
as
a
privately
manageable
resource.
Water
from
the
lacus
was,
by
right,
free,
and
use
was
limited
only
by
the
weight
of
water
and
the
effort
one
had
to
exert
carrying
it
around.
On
the
other
hand,
the
private
service
was
taxed,
an
amount
that
varied
based
on
the
size
of
one’s
supply
pipe
nozzle
(Salzman,
p.
14).
Water,
in
this
form,
was
a
status
symbol,
reserved
to
the
wealthy
few.
There
was
also
a
political
message
associated
with
water.
The
public
fountains,
which
were
numerous
and
lavishly
decorated,
maintained
an
omniscient
imperial
presence,
reminding
the
Roman
people
that
they
received
their
water,
their
well-‐
being,
through
the
generosity
and
permission
of
the
emperor.
How
to
effectively
secure
and
manage
the
use
and
allocation
of
water
is
a
recurring
theme
throughout
history.
Should
it
be
privately
secured
and
distributed?
Should
the
government
play
a
role
in
the
provision
of
water?
A
few
millennia
after
the
peak
of
the
Roman
Empire,
in
the
late
19th
century,
both
London
and
New
York
City
were
dealing
with
these
issues.
In
London,
there
were
a
handful
of
private
companies
allocating
water
to
the
people.
A
cholera
outbreak
through
the
water
supply
due
to
negligent
management,
however,
-‐3-‐
caused
many
to
wonder
whether
private
ventures
should
be
granted
the
power
to
manage
water.
Eventually,
the
Metropolitan
Water
Board
took
over
operation
of
the
water
companies
and
provided
free
water
through
public
fountains,
much
like
in
Ancient
Rome.
New
York
City
also
grappled
with
the
hardships
associated
with
the
governance
of
water
use
and
allocation.
There
were
certainly
public
wells,
but
with
growing
urbanization
and
industrialization,
and,
resultantly,
growing
sanitation
management
problems,
a
number
of
private
allocation
schemes
propped
up,
including
one
that
was
sanctioned
by
the
local
government.
This
latter
one
in
particular,
the
Manhattan
Company,
which
later
became
the
Chase
Manhattan
Bank,
through
corruption,
greed,
and
lack
of
concern,
let
the
water
infrastructure
remain
in
a
state
of
decay.
A
cholera
outbreak
due
to
negligent
management,
similar
to
that
in
London,
finally
convinced
the
government
to
provision
water
publicly
through
the
Board
of
Water
Commissions
(Salzman,
p.
15-‐22).
It
is
clear
that,
even
in
the
not-‐so-‐
distant
past
of
both
the
United
States
and
England,
how
to
effectively
govern
water
was
an
ever-‐present
issue
for
society
to
address.
These
questions
of
water
management
are
still
essential
in
contemporary
society.
We
live
in
an
era
of
massive
population
growth
with
greater
demands
for
food,
higher
standards
of
living
than
the
world
has
ever
seen
before,
and
increasing
urbanization
and
industrialization.
We
are
putting
greater
and
greater
pressure
on
our
freshwater
resources,
especially
surface
water,
which,
when
compared
to
the
composition
of
water
worldwide,
is
a
very
fragile
resource.
Freshwater
comprises
only
2.5%
of
all
the
world’s
water,
and
only
-‐4-‐
0.4%
of
that
2.5%
is
surface
and
atmospheric
water
(“Global
Water
Security”,
p.
ii).
The
surface
water
we
can
access
is
extremely
limited,
and
our
growing
population,
increasing
incomes,
and
thus
increasing
demand
for
food
and
water-‐
intensive
foodstuffs
such
as
meat,
is
pushing
us
toward
the
brink
of
water
crises
worldwide.
Many
of
us
in
the
developed
world
view
water
management
as
an
issue
relegated
to
the
third
world,
associating
water
strife
with
extreme
poverty
and
sickness.
The
truth
is
that
intelligent
water
management
is
essential
even
for
those
in
the
developed
world.
Water
is
a
precious
natural
resource
that
has
endless
applications
and
must
be
managed
effectively.
Despite
widespread
reverence
for
water
as
something
divine,
this
does
not
eliminate
the
necessity
of
its
management.
Like
any
natural
resource,
water
is
subject
to
the
tragedy
of
the
commons.
Without
a
governance
structure
for
water
as
a
resource
in
an
era
of
powerful
technology
and
large
populations,
our
water
resources
would
easily
be
overrun
by
poor
management,
wasteful
practices,
and
excessive
pollution.
Any
society
must
have
rules
governing
the
use
and
allocation
of
water.
Understanding
the
importance
of
governing
water
effectively,
I
wanted
to
know
how
governments
both
past
and
present
have
dealt
with
issues
of
water
management.
Water
has
wide
economic
applications,
but
like
any
resource
those
applications
are
limited
or
facilitated
by
the
laws
governing
the
use
of
water.
Having
a
system
of
law
is
important
in
many
regards,
one
of
which
is
the
facilitation
of
economic
growth
and
innovation
by
protecting
investments
in
the
utilization
of
natural
resources.
Yet
there
is
not
one
strict
form
the
law
must
-‐5-‐
Description:The Roman aqueducts are one of the most amazing infrastructural .. rights to water produce different results, in terms of efficiency and distribution.
