Real and ideal water rights: the prospects for water-rights reform in Israel, Gaza, and the West Bank
The ideal water contract for a heterogeneous population of users is a prioritized right that is fully vested and fully tradable. A set of tradable, prioritized rights contracts will span the same space as the Debreu contingent commodities. Therefore, they lead to a competitive equilibrium that is Pareto optimal. Equal sharing of water shortfalls does not have this property.Existing water policies in Israel and the Disputed Territories are not characterized by an efficient set of water contracts.