Empirical studies have shown that while global per capita freshwater availability is declining, competition among production sectors for the withdrawal of this resource is rapidly increasing. This situation is exacerbated by the rapid population growth especially in developing countries, urbanization, industrialization, externality problems, environmental sustainability and the need to increase food production. At country specific levels, policies have been designed to institute water use efficiency, equity and sustainability. The need to promote sectoral water use efficiency from the demand-side management requires a study to investigate the responsiveness of different production sectors and sub-sectors to variations in water prices. In most instances however, efficient water allocation compromises social equity, especially in a country where there is widespread poverty and where the gap between the rich and the poor is so wide that policies aimed at promoting economic growth should be carefully investigated to find whether efficient water allocation can also address the issue of equity among the different population groups. Review of empirical literature on the econometric approaches to sectoral water demand analysis shows that the agriculture sector has the least marginal value of water compared with the manufacturing, mining and services sectors. Based on this evidence it can be hypothesized that water reallocation from the agriculture to the non-agriculture sectors in South Africa can lead to growth in sectoral output. However, in a country where there is a wide gap between the rich and the poor, equity issues are high on the development agenda. Therefore, the benefits derived from efficient water reallocation should be equitably distributed to improve the standard of living of the critical population. Hence, the second hypothesis is that water reallocation from the agriculture to the non-agriculture sector can lead to an increase in the income of the critical population. To investigate these hypotheses the study: <ol><li>estimated the sectoral water demand functions and marginal values,</li> <li>used both social accounting matrix multiplier and computable general equilibrium analysis to investigate the impact of water reallocation from the agriculture to the non-agriculture sectors on output, factor payments on households’ welfare and </li> <li>analyzed the households’ welfare of the impact of global change on water resources in South Africa.</li></ol> The study used the Global Trade Analysis Project (GTAP) and United Nations Industrial Development Organization (UNIDO) data, and adopted the marginal productivity approach, and the two-stage model to estimate the global sectoral water demand functions and marginal values for thirteen sectors. This model is extended to the sectoral water demand analysis in South Africa. Thus, to validate the results of the global model, the study estimated sectoral water demand functions in South Africa by extracting data from STATSSA’s census of manufacturing and agricultural and services activities, published for each of the nine provinces in South Africa and the 2002 water supply and use accounts published by the same institution. The study tests the policy relevance of the computed marginal values for South Africa by using these values to investigate the impact of reallocating water from the agriculture to the non-agriculture sectors on output growth, value added, employment and households’ income generation.. To accomplish this objective, the study updates the 1999 social accounting matrix (SAM) for South Africa to reflect 2003 entries, computes the required multipliers and uses these to find how water reallocation on the basis of efficiency impacts sectoral output, households income generation and distribution. However, SAM multiplier analyses assume linearity, factor immobility and constant prices. The study therefore uses the computable general equilibrium analysis to investigate the households’ welfare implications of sectoral water reallocation and reduction due to global change. The SAM multiplier analysis shows that reallocation of water from the agriculture to the non-agriculture sectors leads to decrease in the output of the agriculture and the highly inter-dependent sectors. Specifically, output declines in the agriculture, food, beverages and tobacco and the services sectors, while it increases in the other sectors. However, if more than ten percent of the agriculture sector’s water is reallocated to the non-agriculture sector, net output declines, implying that the decline in output in the agriculture, food, beverages and tobacco and services sectors is more than the increase in output in the other sectors. This has consequences for factor remuneration, employment and households’ income. The above decline in the agriculture sector’s output leads to net job losses. Specifically the jobs lost in the agriculture sector are not countered by jobs created in the other sectors that benefit from the water reallocation. This is due to the fact that there are differences in skills requirements by the sectors. While the agriculture sector employs most of the unskilled workers, the other sectors require more medium and highly skilled individuals. This is reflected by changes in the wages paid to labourers. While the wages of unskilled labourers decline, there is an increase in the wages of medium and highly skilled labourers. The simulation results of the computable general equilibrium analysis show that sectoral water reallocation and reduction adversely impact the least and low-income households’ welfare, while improving the welfare of the high-income households. The interpretation is that with water reallocation or reduction, capital is substituted for water in the non-agriculture sectors and this increases the interest paid on capital, which goes to high-income households who are the owners of the capital. The adverse consequence can be reduced if food consumption by the poor households is maintained. To do this, some welfare measures are necessary. One such measure is the distribution of food stamps to the poor households. / Thesis (PhD (Environmental Economics))--University of Pretoria, 2008. / Agricultural Economics, Extension and Rural Development / unrestricted

Der intersektorale Wasserkonflikt zwischen urbaner und agrarischer Wassernutzung in Hyderabad und die Konkurrenz zwischen den Bedürfnissen der Stadt und den Ansprüchen der Landwirtschaft werden verschärft durch willkürliche Verteilungspraktiken, die den offiziellen Zuteilungsrichtlinien oft widersprechen. Übersetzt in die Sprache von Ostrom, gilt die vorliegende Untersuchung der Kernfrage, warum bestimmte praktizierte Regeln (rules-in-use) fortbestehen, obwohl formale Regeln (rules-in-form) im Bereich der Nutzungsrechte an Wasser vorhanden sind. Die Arbeit versucht dementsprechend zu erklären, wie bestehende Institutionen und Governancestrukturen die Interaktionen beteiligter Akteure und deren Verhalten beeinflussen und wie daraus eine durch Willkür gekennzeichnete Umverteilung erwächst. Knights Verteilungstheorie institutionellen Wandels und sein Ansatz über Machtressourcen vermögen zu erklären, wie menschliche Interaktionen in Zusammenhang mit solchen Konflikten über begrenzte Ressourcen zustande kommen. Die Ergebnisse der Arbeit zeigen ebenfalls, welche Wirkungen die Charakteristika verschiedener Gruppen von Wassernutzern und deren spezifische Abhängigkeit von Wasserressourcen auf ihre Fähigkeit zur politischen Einflussnahme ausüben. Solche Ausprägungen von Ressourcenabhängigkeiten bedingen Machtasymmetrien und erhöhen das Ausmaß willkürlicher Umverteilungen von Wasser. Die Untersuchung identifiziert eine Literaturlücke im Bereich der Politik der Wassergovernance, indem sie den Wählereinfluss als Machtressource im Land-Stadt-Konflikt um Wasserressourcen empirisch belegt. Die Arbeit zielt insgesamt darauf, das Erklärungspotential von Eigentumsrechtstheorien zu nutzen und anhand von Wasserkonflikten in Hyderabad ein Beispiel zur Anwendbarkeit aktueller Theorien institutionellen Wandels zu geben. / Hyderabad’s inter-sectoral water conflict and competition between the city’s urban needs and the agricultural sector have been fueled by persistent arbitrary water reallocations against the prescribed allocation guidelines. To translate the key question into Ostrom’s language; this study seeks to unravel the persistence of rules-in-use, despite the rules-in-form already in place within the realms of property rights. Ostrom’s Institutional Analysis and Development framework identifies exogenous variables and its influences on the role of institutions which shapes human interaction and decision making processes. It attempts to explain how the existing water-allocation mechanism has propagated the way rules and actors currently interact to influence such arbitrary water re-allocation. Knight’s distributional theory of institutional change and his concept of power resources provide good explanations of human interaction in the context of such conflicts over limited resources. The study results also reveal how the characteristics of water-user groups and its dependence on water resource have the ability to exert political influence over water allocation. Such attributes of resource dependence characterizes power asymmetry, thereby increasing the scale of arbitrary water reallocations. Henceforth, this study addresses the gap in ‘politics of water governance’ in existing literature by empirically deriving ‘political electorate’ as a power resource in rural-urban water contestation. Overall, this study seeks to employ the theoretical explanations of property rights and attempts to provide a case on the applicability of contemporary theories of institutional change by taking the case study of Hyderabad’s water contestation.

Southern Africa generally has an arid climate and many hydrologists are predicting an increase in water scarcity over time. This research seeks to understand the implications of this in socio-political terms. The study is cross-disciplinary, examining how policy interventions can be used to solve the problem caused by the interaction between hydrology and demography. The conclusion is that water scarcity is not the actual problem, but is perceived as the problem by policy-makers. Instead, water scarcity is the manifestation of the problem, with root causes being a combination of climate change, population growth and misallocation of water within the economy due to a desire for national self-sufficiency in agriculture. The solution lies in the trade of products with a high water content, also known as 'virtual water'. Research on this specific issue is called for by the White Paper on Water Policy for South Africa. / Political Sciences / M.A. (International Politics)

Southern Africa generally has an arid climate and many hydrologists are predicting an increase in water scarcity over time. This research seeks to understand the implications of this in socio-political terms. The study is cross-disciplinary, examining how policy interventions can be used to solve the problem caused by the interaction between hydrology and demography. The conclusion is that water scarcity is not the actual problem, but is perceived as the problem by policy-makers. Instead, water scarcity is the manifestation of the problem, with root causes being a combination of climate change, population growth and misallocation of water within the economy due to a desire for national self-sufficiency in agriculture. The solution lies in the trade of products with a high water content, also known as 'virtual water'. Research on this specific issue is called for by the White Paper on Water Policy for South Africa. / Political Sciences / M.A. (International Politics)