Groundwater is a hidden yet vital resource. Its exploitation has been instrumental in raising agricultural productivity and reducing rural poverty in South Asia, a region that accounts for nearly half of global groundwater used for irrigation. Over the past three decades, there has been an explosion of private investment in borewells and mechanized pumps, allowing access to groundwater to be widely shared. But this profusion of drilling and pumping has also led to serious groundwater depletion.
In this talk, Hanan Jacoby will explore South Asia’s groundwater dilemma through the lens of welfare economics. He will ask: What are the externalities associated with groundwater exploitation and are they quantitatively important? How large are the rents from groundwater extraction and who captures them? Do markets efficiently allocate groundwater across cultivators? And, what kinds of policies can arrest groundwater depletion? The talk will draw on evidence from India and Pakistan from a variety of sources ranging from agricultural censuses to specialized surveys.
Last Updated: Apr 21, 2015