ABSTRACT
This chapter shows how Macro-Economic Integrated Analysis of Hydrology (MEIAH) is used to study potential policy reforms, whose costs and effects are brought out by the model's economic analysis. The policy options are at three levels: the local, the national government, and the international setting. Economic development and environmental issues are often closely related. Patterns of development that erode the environmental resources on which development must rely are obviously unsustainable. To prevent groundwater depletion, a sustainable extraction limit should be set for all groundwater aquifers. Groundwater costs less than surface water for urban use, since it does not need expensive filtration. The focus of international organizations and policy analysts has shifted towards the effectiveness of the government and of domestic reforms as a key factor in achieving a good pace of economic development. Water scarcity constrains the range of possibilities of water-resource expansion at an affordable price.
