The Mekong River is shared by six Asian countries. Over the years there has been both conflict and cooperation on managing the water resources to meet population growth, climate change and the desire for economic development. This paper exploits an axiomatic bargaining approach to examine how China and the Mekong River Commission (MRC) might negotiate effective joint management. We show that there are significant welfare gains from cooperation in this region; an exogenous budget provides stronger incentives for cooperation; and the MRC should be extended to include all affected nations for sustainable management and future development. The economic costs of the current weak governance and its effects on the negotiated joint management are discussed..


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