ABSTRACT
The application of economic and market principles has been a significant policy shift in the international water sector over the last two decades. It has taken two main forms: private sector participation in urban water supply and schemes for tradable water rights. Tradable private water rights have been recommended on the basis that market mechanisms are able to increase the efficient management of scarce water resources, by encouraging water allocation to higher value uses. The promotion of water rights markets for low-income countries has drawn heavily on the case of Chile, which, since 1981, has operated a system of private water rights that can be freely traded with almost no government regulation. In Chile, water rights, or concessions allowing the exclusive use of water, have existed in various forms since colonial times. Chile’s military government is often noted for its two key characteristics: political authoritarianism and a neoliberal economic program.
