Quantifying the Effects of Institutional Shifts on Water Governance in the Yellow River Basin: A Social-ecological System Perspective

Abstract

Water governance in river basins worldwide faces challenges due to complex socio-economic and environmental factors. In the Yellow River Basin (YRB), two major institutional shifts, the 1987 Water Allocation Scheme (87-WAS) and the 1998 Unified Basin Regulation (98-UBR), aimed to address water allocation and usage issues. This study quantifies the net effects of these institutional shifts on water use within the YRB and analyzes the underlying reasons for their success or failure. We employ a Differenced Synthetic Control method to assess the impacts of the institutional shifts. Our analysis suggests that the 87-WAS unexpectedly increased water use by 5.75%, while the 98-UBR successfully reduced water use as anticipated. Our research highlights the role of institutional structures in governance policies, demonstrating that the mismatched structure of the 87-WAS led to increased competition and exploitation of water resources, while the 98-UBR, basin-wide authority and stronger connections between stakeholders, resulted in improved water governance. Our study underscores the importance of designing institutions that are consistent with the scale of the ecological system, promote cooperation among stakeholders, and adapt to changing social-ecological system (SES) contexts. As outdated and inflexible water quotas may no longer meet the demands of sustainable development in the YRB, policymakers must consider the potential consequences of institutional shifts and their impact on water use and sustainability.