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Abstract
Groundwater has the characteristics of commonly owned property, and its use is likely to be
inefficient in the absence of regulation. Several management tools can be used to regulate groundwater
withdrawals, with no one tool dominating the others in terms of efficiency of water use.
However, the welfare distributional effects of various management schemes on individual users
who vary in their derived demands for groundwater might be quite substantial, and different users
may find considerably different schemes attractive.
The equity problems associated with the division of management benefits may dominate the
decisions about support of or opposition to groundwater management, and hence they must be
undertaken with considerable care and resolved by consensus among users. Although the negotiations
are expected to be extensive and complicated, there is a substantial basis for agreement
because all users stand to gain; the question is, who will gain the most?