Water Scarcity and Conflict Between Upstream and Downstream Riparian Countries

More than one quarter of the world’s population lives in water-scarce areas, while most countries share at least one transboundary river with at least one riparian country. Knowing that, one question comes to mind: if water-scarcity is prevalent, should we expect riparian countries to fight over the water allocation of shared rivers? To answer this question, I use a modified version of the river sharing game in which countries can resort to force to solve the water allocation problem. Using backward induction, I solve for the probability of the downstream country using force against the upstream country, and the probability of the latter responding with force to the former’s hostile actions. I test the model empirically using the maximum likelihood complementary log-log model using a set of all upstream/downstream riparian dyads with available data from 1960 to 2012. Both the theoretical and empirical results indicate that water scarcity is a significant determinant of the downstream country’s decision to use force, while the upstream country’s scarcity level has no significant impact on their decision to respond with force. The results suggest that a future increase in conflict over water between upstream and downstream riparian countries is not farfetched. (JEL Codes: F51, Q25, Q27, Q34)

Publication type: 
Working paper
Date published: 
Friday, July 19, 2019