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The paper provides an integrated framework to assess water markets in terms of their institutional underpinnings and the three ‘pillars’ of integrated water resource management: economic efficiency, equity and environmental sustainability. This framework can be used: (1) to benchmark different water markets; (2) to track performance over time; and (3) to identify ways in which water markets might be adjusted by informed policy makers to achieve desired goals. The framework is used to identify strengths and limitations of water markets in: (1) Australia’s Murray-Darling Basin; (2) Chile (in particular the Limari Valley); (3) China (in particular, the North); (4) South Africa; and (5) the western United States. It identifies what water markets are currently able to contribute to integrated water resource management, what criteria underpin these markets, and which components of their performance may require further development.

An Integrated Assessment of Water Markets: Australia, Chile, China, South Africa and the USA