chapter  Chapter 12
Allocative Impacts of Alternative Methods of Charging for Irrigation Water in Egypt
WithRichard L. Bowen, Robert A. Young
Pages 13

In Egypt, as in many countries where public irrigation is important, the system of pricing or charging for water is of concern for its impact on resource allocation and income distribution, and as a source of revenue. The revenue flows into the government's general fund from which the Ministry of Irrigation must obtain its budget for operating, maintaining, and expanding the irrigation system. This chapter assesses how alternative methods of charging for irrigation water in Egypt impact allocative efficiency. Welfare economists have developed the theory of marginal cost pricing, which maintains that public prices be set equal to marginal social costs. The major societal objectives in the literature can be placed in two categories: allocative efficiency and equity. The allocative efficiency objective is concerned with the classic economic problem of allocating scarce resources to maximize net social benefits. The formulation of equity objectives is assumed to involve political concerns and not be just an economic issue.