Introduction to Drinking Water Management - Global Drinking Water Management and Conservation - page 2

Chapter 1
Introduction to Drinking Water
Management

1.1 An Apologia or Why I Wrote This Topic

Why should an economist write a topic on water resource and drinking water
management? What are the principles of economic theory that are relevant to the
desirable objective of clean and healthy water, not only for human consumption but
also for ecosystem health?
One obvious answer is the presence of what economists call

”
There is no doubt that modern agricultural, mining, and industrial activity has
indeed raised the wellbeing of citizens, but this has come at a certain social cost that
is not taken into account. A negative externality is nothing more than an unac-
counted social cost. Economics argues that that is precisely when the State must
intervene

“ externalities.

When the State fails to
take adequate corrective action, we see evidence of environmental degradation. It is
this failure of adequate control, regulation, and management of not only treated
drinking water but also the sources of drinking water that we see in many parts of
the world, including North America. The motivation behind this topic is also
provided, in part, by the fact that we have a sorry record of waterborne disease
outbreaks that clearly carry the message that not all is well in the way we care for
drinking water, pay for it, and then dispose of the wastewater into the very
watercourses that are our drinking water sources. The failure of an adequate gov-
ernment response to deal with the externalities is also indicative of the decline in the
role of government from what might be called optimal from a social point of view.
It is sometimes forgotten that the guiding principle of economics is the imple-
mentation of the

“ in the interests of society and future generations. ”

“ social good, ” although this “ social good ” is typically interpreted

as a “ competitive equilibrium, ” in which no negative externalities exist, or have

been by appropriate State action.

Note that this social good does not necessarily involve redistribution of income
to enhance wellbeing of some, or invoke the Rawlsian difference principle for a
“

“ corrected ”

liberal ” society (Rawls 1971 ). That of course requires an activist State. Our