This project investigated the effectiveness of existing groundwater management institutions utilizing economic models and institutional analysis to suggest alternative institutional arrangements and the feasibility of obtaining them. Several existing groundwater basins were chosen for study. A sensitivity analysis showed the change in economic incentive with a change in various parameters suoh as discount rate, availability of surface water, etc.
The present groundwater institutions and laws in California were developed under very different conditions than now exist creating inefficient groundwater management; moreover, these institutions and las are entrenched in an institutional framework into which billions of dollars has been invested yielding a resistance to change. Most institutional change has resulted from threatened legal or court action and the lack of supplemental surface water supplies. When supplemental surface water is lacking, a groundwater management scheme will contain some inequities for individual pumpers. However, a revised institutional structure will be necessary to meet the future groundwater demands.