Against the Current: Privatization, Water Markets, and the State in Chile
In 1981 Chile's military government dictated a new Water Code that radically changed the country's previous water rights system by strengthening private property rights, favoring market incentives, and reducing state regulation. Against the Current: Priva
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CARL J. BAUER University of California, Berkeley
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Springer Science+Business Media, LLC
Library of Congress Cataloging-in-Publication Data Bauer, Cari J., 1960Against the current : privatization, water markets, and the state in Chile I by Cari J. Bauer. p. cm. -- (Natural resource management and policy) Includes bibliographical references and index. ISBN 978-1-4613-7942-3 ISBN 978-1-4615-6403-4 (eBook) DOI 10.1007/978-1-4615-6403-4
1. Water-supply--Economic aspects--Chile. 2. Water rights--Chile. 3. Water-supply--Government policy--Chile. 4. Privatization--Chile. 1. Title. II. Series. HD1696.C5B38 1998 98-28298 333.91 '00983--dc21 CIP
Copyright © 1998 Springer Science+Business Media New York Originally published by Kluwer Academic Publishers, New York in 1998 Softcover reprint of the hardcover 1st edition 1998
AH rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher, Springer Science+Business Media, LLC Printed an acid-free paper.
TABLE OF CONTENTS LIST OF MAPS
Vll
LIST OF TABLES
IX
ACKNOWLEDGMENTS
XI
1
2
3
INTRODUCTION Water, Markets, and Privatization
I
Recent Political and Economic History in Chile
3
Analytical Framework: Geography, Political Economy, and Law
6
Research Methods
7
Outline of Book
8
Notes to Chapter One
9
BLUEPRINT FOR THE NEOLIBERAL MODEL: LAW, ECONOMICS, AND POLITICS IN THE 1980 CONSTITUTION
11
Origins and Politics of the 1980 Constitution
12
The Economic Constitution
17
The New and Contradictory Role of the Judiciary
19
Diagnosis and Reform of the Judicial System
22
Conclusions
24
Notes to Chapter Two
26
WATER RIGHTS AND THE LAW OF THE PENDULUM: LEGAL AND POLITICAL HISTORY OF THE 1981 WATER CODE
33
Goals and Principles: Private Property and Free Markets
34
Historical Background: Chilean Water Law up to the 1970s
36
Steps Toward a Neoliberal Water Code, 1976-1981
40
Conclusions
44
Notes to Chapter Three
46
4
5
6
BRINGING WATER MARKETS DOWN TO EARTH: WATER RIGHTS TRADING IN PRACTICE, 1980-1995
51
Irrigated Agriculture in Chile: Two Study Areas
52
The Water Market in Practice, 1980-1995
56
Why Water Rights Trading is Limited
60
Peasant Farmers and the Water Market
67
Reforming the Water Code
68
Conclusions
71
Notes to Chapter Four
73
PRIVATE PROPERTY AND RIVER BASINS: WATER USE CONFLICTS, THE MARKET MODEL, AND THE COURTS
79
Judicial Behavior in Water Rights Cases
80
Non-Consumptive Rights and River Basin Management
84
Hydroelectricity and River Basin Conflicts in South-Central Chile
86
Reforming River Basin Institutions
106
Conclusions
108
Epilogue
110
Notes to Chapter Five
110
CONCLUSIONS
119
BffiLIOGRAPHY
125
INDEX
159
VI
LIST OF MAPS
MAP!
Water market study areas: Central Chile
53
MAP 2
Bfo Bfo River basin
88
MAP 3
Maule River basin
96
LIST OF TABLES
Area irrigated by canals built wholly or
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