Three essays in the federalism of water policy

This dissertation consists of three essays about issues arising from the federalistic nature of U.S. water resource policy. The first essay examines disputes arising from the uncertainty over control of interstate resources under federalism. I investigate how courts affect the efficiency of bargaining between two parties over an indivisible property right when there is private information over the values of the right. If negotiation fails, players may choose to go to court where the de facto property right will be overturned with some probability. In the first model, the court is completely unresponsive to the players\u27 behavior. In the second model, the court is partially responsive to actions of the bargainers: greater legal expenditures lead to a more favorable outcome. I show that bargaining outcomes may be less efficient than if players could negotiate without a court option. The other two essays use the universalistic model of legislative decision making to examine the provision of Corps of Engineers water resource projects. First, I empirically investigate the economic and political factors that have influenced annual spending on water resources over time. Despite the perception that these projects are almost purely politically motivated, I find that economic factors have been important in determining the amount of water resource spending: from 1865-1920, economic development and industrialization increased spending; from 1921-1988, water resource spending appeared to be counter-cyclical. I find evidence that majority parties controlled spending levels in the early period, while in the modern period, legislators act under a norm of constrained universalism and are influenced by the costs to constituents of increased spending. In the final essay, I empirically investigate the impact of increased local cost-sharing on a sample of water resource projects that were selected both before and after a change in the cost-sharing rules. I find that project size is negatively related to the non-federal share of costs, and there is some evidence that local economic conditions, such as unemployment and income, impact project size