Water: An Economic or Social Good?

Abstract

Water is a critical natural resource for life and for development. This vital resource is however fugitive and finite. The conferment of such attributes on water suggests that the resource has to be managed from both economic and social standpoints otherwise some people will go without water. The paper thus reviews concepts and principles which relate to the management of water as both an economic and a social good. The argument which sticks out in the discussion is that trade-offs and compromises have to be made between treating water as an economic good and as a social good. Treatment of water as a social good encourages the inefficient and wasteful use of water. At the same time, treatment of water as an economic good would exclude other people from accessing this vital resource. Thus it is argued that water should be provided to the users taking into consideration that it is both an economic and a social imperative. The global search for solutions to the problems of water scarcity and increasing demand on the available finite freshwater reserves should continue. In this vein, efforts should and must be made to impress upon consumers of this all-important resource to appreciate the economic and social value of water.