ABSTRACT
The realization that water resources are getting scarcer and that the development of new sources is only possible at great cost has changed the way in which the management of water resources is viewed (Saleth and Dinar, 1999), the emphasis shifting towards the more efficient use of the existing stock of water. Water should accordingly be considered an economic asset. Such an approach implies that the old centralized administration accompanied by the bureaucratic allocation of water must be replaced by decentralized procedures in which users can participate directly and where provision is made for the use of economic instruments such as the trade in water use entitlements.
