Equity-Efficiency Trade-Offs in Irrigation Water Sharing: Evidence from a Field Lab in Rural Tanzania

Abstract

This article studies how users of scarce common water resources deal with equity-efficiency trade-offs. For this purpose, we conduct a field lab experiment in Tanzania that simulates the distribution of irrigation water between upstream and downstream users. We find a strong preference for equal sharing even if this comes with large foregone efficiency gains. However, we also find indications that efficiency considerations are taken into account. (Selfish) deviations from equal sharing are more likely implemented when they are efficiency-enhancing. Finally, we detect a tendency to alternate between altruistic and selfish sharing, which reconciles equity and efficiency considerations.