South Africa’s water regulatory and policy framework: a new institutional economic review

Abstract

The institutional dynamics , policies, and legislation that were prevalent during the apartheid era have left imprints that are difficult to ignore as they still dictate the interaction between different elements in the water sector to date. The existence of riparian water rights made the legislation excluding and racist as far as water access was concerned because of the indisputable link between land ownership and access to water. Post-apartheid, the National Water Act (NWA) of 1998 has transformed the water regulatory landscape from the riparian system to a system aimed at achieving equitable water allocation for the benefit of all. It has done away with a private right system of water allocation by detaching water rights from land ownership. However, the water sector in South Africa is still facing a number challenges, leading to a delay in achieving some of the goals of the post-apartheid water law. This paper provides a review of relevant water policies and/or statutes from a new institutional economics (NIE) perspective to assess the success, or lack thereof, of post-apartheid water policy in South Africa. This paper found that South Africa’s water policy is premised largely on neoclassical economics framework. It concludes that the failure of the NWA and other institutions to incorporate social norms and customs is more likely to the persistence of skewed distribution of water resources.