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| Title
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The case of New Water Fee System in the Republic of Macedonia
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| Subtitle
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Market and non-market failure in path dependent institutional reform
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| Author
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Hatzius, T.
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| Editor or Organisation
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GIZ
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| Year
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2000
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| Keywords
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water price system, path dependency, institutional reform, natural resource management, water economy sector reform, transition countries
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| Country
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Republic of Macedonia, South-East Europe
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| Type
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good practice
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| Language
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English
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| Table of Contents
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1. Introduction
2. Market-failure, non-market failure and path dependency - some specifications
3. Issues of institutional reform in the Macedonian water economy sector
4. An institutional approach to water pricing - some theoretical aspects
5. Current issues of institutional reform in the Macedonian water economy sector - some conclusions
References
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| Abstract
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The paper analyses some of the reasons for the decline in irrigated area which is explained to be transitory and related to failing markets and non-market institutions, path dependency, design problems in formal institutions and time lags in the adaptation of informal institutions to the changes in formal ones. The result is an inadequate incentive structure for stakeholders, the principal ones being public sector institutions, the public water economy enterprise, the regional water management organisations (WMO) with the people working therein, and, last not least, the farmers. The insufficient organisation of irrigation farmers, the decreasing propensity of farmers to pay the ever increasing fees for deteriorating services of the WMO, and the bad state of irrigation infrastructure are identified as central causes and effects at the same time, resulting in a vicious circle which is hard to get out of. Some features of the institutions decreed by the New Water Law of 1998 leading to a re-centralisation of the Macedonian water economy sector and the creation of the Public Water Economy Enterprise are seen to go against the insights gained in recent years by development practitioners and academics working on water resources management. After defining four principal problem areas, it applies concepts of neo-classical and new institutional economics to develop elements of a conceptual framework for the design of an appropriate institutional configuration for the water economy.
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| Permission
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Yes
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| Category
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Economics
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| File
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