Improving Governance Arrangements for Sustainable Agriculture: Groundwater as an Illustration

Abstract

The aim of this article is to provide a balanced assessment of the critiques of environmental regulation as it affects the rural sector and of the main proposed alternatives: deregulation or the use of markets. We argue that the deregulatory and free market alternatives tend to overstate the costs and understate the benefits of regulation and that they do not provide clear insights into what is "efficient" because the methods tend to aggregate necessary and intended costs, collateral and unintended costs, opportunity costs and transaction costs. However despite these significant caveats it is clear that it is in the public interest to create laws that do work better and are less costly. We suggest that one measure to achieve effectiveness and efficiency must be robust review and reform of the system of laws, not just individual laws. We also argue that the pursuit of sustainability must involve a synergistic relationship between traditional and more contemporary governance approaches and that any treatment of them as alternative rather than complementary instruments unnecessarily narrows strategic options for effective resource management. Further, intrinsic to far more effective regulation is managing total transacting systems using a variety of instruments and behavioural interventions, rather than focusing on a limited set of transactions with a limited set of interventions. This represents a significant change to natural resource management (and particularly natural resource regulatory practice) but it is essential if we are to move beyond the present unsatisfactory situation.