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It is usually taken for granted that the existence of water markets allows economic efficiency gains to be achieved at the expense of equity losses. This paper addresses the issue by analysing the functioning of the irrigation communities in pre-1950s eastern Spain. While in some of them the water inhered in the land and could not be sold, in others there were tradable water rights. In the paper it is shown that, in the former, not only was equity greater but in fact the resource was also used more efficiently.

Governing scarcity. Water markets, equity and efficiency in pre-1950s eastern Spain