Markets awash: The privatization of chilean water markets

Abstract

This article discusses the Pinochet regime's market-oriented water code and argues that in some areas, the law allowed the creation of an active water rights' market, but that in other areas, it failed to promote a market because it disregarded the variability of water throughout Chile and failed to provide for adequate mechanisms for water storage and distribution. Reforms implemented during the Concertaciόn governments have improved the functioning of water markets by establishing fees and incentives to avoid speculation, improve regulation and protect the environment. This article concludes by proposing a set of policy recommendations to improve water distribution and protect the environment. © 2011 John Wiley & Sons, Ltd.