Water, the economy, and development: New insights on a complex challenge


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Photo: Asian Development Bank via Flickr Creative Commons

In the World Bank Water Practice, we often talk about how issues like flooding and droughts threaten our mission to end poverty and boost shared prosperity. But how much do we actually know about how these floods and droughts — "water shocks" — impact farmers, firms, and communities? Perhaps adaptation in the economy has limited such impacts. Or maybe policies have led to economies being more vulnerable to such shocks.

To explore these questions, we recently gathered with leading researchers and policymakers in Oxford, UK, and concluded that while preliminary findings indicate water shocks definitely represent a major challenge to sustainable development in surprising and unexpected ways, there’s still much more we can do to strengthen the evidentiary basis for development policy.

For the past half year, a team led by Richard Damania, Global Lead Economist for the Water Practice, has been working to better understand the linkages between water shocks, the economy, and development. Their research will form the basis of a report tentatively titled "Uncharted Waters: New Insights on a Complex Challenge," that sheds new light on how water shocks, and water infrastructure, impact people, farms, forests, and firms — taking a cross-sectoral approach, going from the macro to the micro level, to contribute to the understanding of the dynamics at play across settings and issues.

During the Oxford workshop, the team presented preliminary results on four research projects using a wide range of data focusing on:

  • how water shocks impact agricultural productivity and cropland expansion;
  • how water supply disruptions affect firms’ bottom lines;
  • how water shocks experienced in early childhood affect later-life economic and health outcomes;
  • how water and sanitation infrastructure helps buffer cities from water shocks.   Participants included leading experts on flood control policy, econometric analysis, policymakers and representatives from the UK Department for International Development (DFID). 

While much of the discussion focused on refining the team’s methodological approach, perhaps the liveliest discussion centered on the policy implications of the team’s report.

Richard Damania speaks at the event held
at the Oxford Martin School.


Oxford water expert Dustin Garrick and Australian National University Professor Quentin Grafton, co-authors of a chapter in the report, led a discussion on how to help policymakers incorporate the results of the report into decision-making. Garrick and Grafton proposed a new framework called JADE (Just and Allocative Dynamically Efficient) to help water policymakers develop policies that balance economic development and equity, and led World Bank, DFID, and Oxford University participants in an exercise for applying JADE to several real-world situations, including Sao Paulo’s drought and Kenya’s water supply challenges.

The conclusion? That each challenge is different, but having a structured process can help policymakers identify and weigh trade-offs between different water uses and different water policy objectives.

This discussion continued at the workshop’s flagship event held at Oxford’s historic Martin School attended by over 150 participants. Richard Damania gave a presentation laying out the approach and preliminary results, followed by two panel discussions with leading water experts. Much of the discussion focused on two key issues, climate change and working in countries affected by fragility, conflict, and violence. Panelists and participants produced a number of suggestions for how the World Bank report could better influence the climate change discussion, including an invitation to engage with a major new research project being conducted by the Intergovernmental Panel on Climate Change, and recommendations on working with researchers to improve data availability and decision-making support, particularly in countries with low institutional capacity.

Despite plenty of debate and discussion during the two-day event, one common theme emerged among the researchers, practitioners, and experts assembled in Oxford: strengthened partnerships are essential to tackling the world’s water challenges . The World Bank team looks forward to sharing the results of the Unchartered Water report — and to hearing what you think!


Scott Michael Moore

Young Professional and Water Resource Specialist, Water Global Practice

Michael Stoyke
February 03, 2017

Dear Scott, dear Water Blog team,
I'd like to enquire whether it'd be possible to repost this article on the Nexus Resource Platform - of course with proper link to the original publiation here. We have cooperated with you before.
The Water, Energy & Food Security Resource Platform is an independent information and facilitating platform funded by the Federal Ministry of Economic Cooperation and Development (BMZ) and the European Union. The Platform has been around since the Bonn2011 Nexus Conference. It has recently been relaunched and will have a contact desk in MENA region and Latin America shortly.
Please let me know!
Michael Stoyke
Editorial Team

Manuel J. Galvez
February 25, 2017

You must have heard about the aquifer storage and recovery systems which help provide solutions to the looming crisis on water supply. This practice is prevalent in many areas of the world. Here in yhe Phiilippines, we will soon be adopting the ASR to address problems on flooding and drought. Care to join us?

Federico G. Luchico, Jr.
March 02, 2017

Hi to my countryman Manuel J. Galvez.
It is exciting to know that we shall implement ASR in our country. I have limited idea about this practice in USA and Australia. I understand that there some technical kinsks like mixing of fresh with saline water, etc. But anyway, can kindly apprise a senior citizen about this new technology. Thank you very much KABAYAN (countryman). Mabuhay!

link alternatif vwin
March 13, 2017

I do agree with all the ideas you have offered for your post.
They are really convincing and will certainly
work. Still, the posts are very quick for novices. May just you please prolong them a bit from next time?
Thanks for the post.