From State to Market?: Water Mercantilización in Spain

Abstract

Many governments have recently initiated a process of water sector mercantilización—the introduction of markets or market-simulating decisionmaking techniques, and the participation of private companies and private capital in water management. This paper presents a case study of the mercantilización of water resources in Spain. State-led development of water resources was a key element of Spain's modernisation drive in the mid-20th century, intended to redress not only the high degree of temporal and spatial variation in water availability, but also to underpin the agricultural colonisation of the country's arid interior. Water-resources development, pricing, and allocation remained, with few exceptions, the preserve of the state. In 1999 the government reformed the national Water Law, introducing both water markets and water banks; this in addition to earlier reforms enabling the participation of private companies and private capital in water-resources development. The case study, situating the evolution of water policy within an analysis of key macro political – economic trends (in particular, Spain's transition to democracy and EU-mandated economic convergence) and the country's contested hydropolitics, is employed as a means of elaborating a more general political ecological – economic understanding of the mercantilización of water.