Informal groundwater-based pump irrigation services markets are an all-pervasive agrarian institution in South Asia, but have been criticised for bringing about less than equitable outcomes and causing groundwater over-exploitation. In view of these drawbacks of private water markets, many scholars have advocated "alternative institutional arrangements" in water sharing. The alternatives however, violate basic conditions of private water market transaction and are not appropriate.
The paper concludes that in many cases alternative institutional arrangements have superior equity outcomes than pure private water market transactions. The success of each intervention is path dependent and contingent upon unique village history, geography and politics. The author's policy recommendation is that replication of these institutional models, must recognise this path dependent nature of these institutions and provide conditions for alternative institutional arrangements in water sharing to emerge on their own, rather than through state effort.
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