Abstract
This article explores the origin and cost of conflict within the Metropolitan Water District of Southern California (MET), a cooperative of 26 member agencies delivering water to nearly 20 million people. Conflict within MET has existed for over 30 years, but increasing population and decreasing water supplies mean that this conflict is becoming more costly in terms of direct conflict, policies that misallocate water, and expenditure on unnecessary infrastructure. Although conflict exists within most businesses and bureaucracies, it is often difficult to identify the positions and actions of parties to the conflict and to observe the effects of conflict. This case study is useful for its clear illustration of how diverging objectives among participants (autonomous member agencies) result in conflict and the different costs that result from conflict.
Highlights
This story of conflict over water within an organization is a logical extension, and complement, to studies of conflict over water among organizations that were highlighted in a 2007 symposium issue in volume 2(2) of this journal
These conflicts can persist because Metropolitan Water District of Southern California (MET) is a government agency with a monopoly on water distribution, faces weak outside pressure for change, and distributes the costs of conflict and inefficiency to member agencies who have little say over operations and generally no idea of MET’sefficiency. (This example of conflict may apply to water distribution organizations that have an asymmetric distribution of costs and benefits among customers.)
This article tells the story of an organization—the Metropolitan Water District of Southern California—that suffers from internal conflict
Summary
This article tells the story of an organization—the Metropolitan Water District of Southern California (MET, for short)—that suffers from internal conflict. In this article conflict refers to negative expected value such as zero- or negative-sum fights over access to MET’s water or cross-subsidies to projects that do not pass cost-benefit criteria (except for those member agencies that benefit from a project subsidized by others) These conflicts can persist because MET is a government agency with a monopoly on water distribution, faces weak outside pressure for change, and distributes the costs of conflict and inefficiency to member agencies who have little say over operations and generally no idea of MET’s (in)efficiency. Market and price tools are familiar to economists but not often used by the engineers, bureaucrats, and politicians who control MET’s policies and operations Because these managers bear the cost of change without obvious benefit to themselves, and because water customers bear the cost of inefficiency without power to change MET, inertia and inefficiency persist
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