ABSTRACT
This chapter compares water markets in California and Spain with the ultimate goal of assessing whether Californian water markets have been more active than Spanish ones because California has better fulfilled the governmental roles discussed in Chapter 2. The conclusions offered here illustrate the main theoretical finding, namely, that water markets require public agencies to fulfill certain roles, justified under economic theories of regulation, to work success - fully. These roles relate to defining property rights, reviewing for externalities, providing access to natural monopoly infrastructure, and reducing transaction costs. Independently, the two case studies offer lessons for other jurisdictions about which water market regulations work and which do not.
