Irrigation reservoirs as blue clubs: Governance and policy intervention

Reservoirs are increasingly deemed to be important given their potential control of water availability across seasons, from wet to dry seasons, especially given the concerns on the effect of climate change. In this paper, we assess the potential scope for policy intervention on the construction of irrigation reservoirs and its design, focusing on the collective action aspect. We formulate a theoretical model in which farmers pool resources to construct a collective reservoir. We conceptualized the reservoir as a “blue club” that increases the potential water availability in dry season, thus improving water safety for the whole society. We determine the societal potential inefficiency in club size and the policy measures to correct it, focusing on two different club access rules (open vs closed membership). Results show that linear subsidy are ineffective in case of closed membership, and minimum participation rules are required to increase the club size.