Publication Code: N37
Institutional Problems in Thai Water Management
This report presents the findings of a diagnostic survey of the institutional framework for water management in Thailand, which was conducted during June through November, 1993. The survey and analysis of Thai water institutions were carried out with three purposes in mind. First, the authors aimed to take a comprehensive approach to water management, looking at the interdependence of different areas of water policy and iditifying the key management problems that have arisen in the system as whole. Second, the authors strived to specify features of the institutional framework which are inadequate to resolving emerging water allocation problems. And third, the authors relied on the foregoing analysis to judge the potential impact and consequences of proposed legislation to introduce water pricing and new administrative arrangements.
In the main report the authors identify the chief problems in Thailand's water management system. Thailand has been suffering from three primary problems in the water sector, namely dry season allocation, ground water depletion, and the deterioration of water quality. At the root of these problems are egregious market failures stemming from a management approach which treats water as an "open access" resource, and from the production of negative externalities in the form of wastewater discharges into the water stream. For these market failures to be resolved, the introduction of economic instruments must be coupled with adjustments in the institutional framework. Recently, two pieces of water legislation have been drafted and submitted to the Cabinet for consideration. Upon reviewing the contents of these drafts, the authors argue that these draft Codes on their own are not likely to resolve some of the more critical institutional problems at hand.
Problems in Thai water management include the lack of a prevailing allocation philosophy; the existence of too many water agencies marked by overlapping mandates, vested interests, and acute turf battles; uneven water infrastructure, with some aspects of the system still at a very rudimentary level of modernization; and a tendency to focus on increasing the supply of water at hand, without enough attention paid to improving the water infrastructure or demand-side inefficiencies. As water supplies continue to dwindles and demand simultaneously increases, existing institutions come under greater stress, and improvements in the efficiency of water use become imperative.
To increase user efficiency and conservation in water use, Thailand will require something more than the passage of laws introducing economic instruments, such as pricing. In addition to the "open access' water regime which prevails in Thailand, inefficiencies in water use are encouraged by the poor quality of government water services. Moreover, the prevalence of an open access water regime is, in part, a consequence of the public sector's inability, or unwillingness, to enforce a different set of rules. The reform of the legal and administrative arrangements in water is a necessary ingredient both for improving the water infrastructure, and for supporting the introduction and enforcement of market-based policy instruments, should that option be pursued.
One chief drawback of both pieces of draft legislation is that they do not specify the kinds of institutional reforms that would be necessary to make the either of the new laws effective. Economic incentives can encourage water users to conserve water. They can also be a powerful tool in making government services more efficient. By tying monetary rewards to the improvement of government services, much of the water infrastructure could be upgraded, while at the same time the enforcement of market-based policies could be improved. In either draft, new instruments are introduced but this connection is not established.
May 1994