Hierarchical Structure of Water Governance

This chapter first of all reviews the organizational theory of new institutional economics in order to pave the way in literature and methodology for the study of water governance structure. Then, it proceeds with the basic implications of water governance and finds that the most important output of water governance is to ensure water security. The collective actions for this purpose result in a continuum of governance structure. China’s “hierarchy” model is the highest level of hierarchical system in water governance structure, which is unique in the world. It contributed to the unification of the country in the Qin Dynasty more than 2000 years ago and has continued with the unified political system till today. This chapter constructs a classical choice model for water governance structure that is used to explain the origin of the hierarchy water governance structure. The demand for hierarchy water governance structure is the decisive factor for the formation of the early unified political system in China. This is the view of scholars of the water governance school (Curtis, 2009; Huang, 2002; Needham, 1981; Wittfogel, 1957). By employing the modern economics analytical tools to interpret the relations between water governance and state governance, this chapter enriches and develops the theories of the water governance school.