Water Allocation Institutions in South Dakota: An Economic Analysis of Law and Policy

South Dakota uses a substantial quantity of water. Primary uses are irrigation, domestic, and industrial. The amount of water used is increasing as population grows, as farmers implement the use of irrigation as a risk reducer, and as the state’s economy becomes more diverse. Within South Dakota there is both geographic and temporal variability, resulting in various degrees of scarcity relative to the quantities demanded. The allocation method for the available water must be appropriate for these variations. This thesis is an economic analysis of the law and policy of South Dakota’s water allocation institutions. The primary purpose of this study is to determine if the current South Dakota water laws are economically effective in allocating the available and future water resources. Such an evaluation will improve the likelihood that the state and its citizens receive the maximal return from the use of one of its most valuable resources. State government agencies such as the Department of Water and Natural Resources, and the state legislators can benefit from this thesis as it presents an analysis of the institutions of water allocation in South Dakota