A tale of two water markets in Australia: lessons for understanding participation in formal water markets

摘要: Water markets are promoted as a demand-management strategy for addressing water scarcity. Although there is an increasing literature on the institutional preconditions required successful formal markets, has been less focus understanding what drives participation after establishment of basic enabling conditions. Participation can be measured in terms either trading activity (conducting permanent or temporary trade) and/or trade volumes across time and market products. Australia’s Southern Northern Basins Murray-Darling Basin provide notable example ‘tale two markets’, offering insights about economic policy levers that drive different hydrological, irrigation, socioeconomic contexts. Key lessons include: distribution initial property rights resource allocation; need to prepare seize opportunities strengthen rights; robust monitoring compliance requirements—all which will reduce transaction costs increase participation.