Use of bankruptcy methods for resolving interprovincial water conflicts over transboundary river: Case study of Indus River in Pakistan

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AbstractSustainable transboundary water governance is often challenged by conflicts between agents, which necessitates the design of cooperative and self‐enforcing alternatives to facilitate equitable water distribution. A pervasive and critical problem related to many transboundary rivers is that the total allocation or demand of riparian states is usually much more than that of the total available water. This problem is a major cause of disputes, both nationally and internationally. A key challenge concerns how to allocate the available water among riparian states with competing and often conflicting needs under an uncertain supply–demand gap. To address this pervasive allocation problem related to transboundary rivers, the bankruptcy method is used. The bankruptcy method distributes water among riparian states when their total demand exceeds the total available water. We investigate the utility of this method in the Indus River – a river that is shared among the four provinces of Pakistan, namely, Punjab, Sindh, Baluchistan and Khyber Pakhtunkhwa (KPK) – using five commonly used bankruptcy rules and the Shapely value. Two new bankruptcy rules namely the “groundwater‐based rule” and “the proposed rule” are also proposed to address the usage of groundwater: the land affected by salinity and the gross domestic product (GDP) of each province. Additionally, this paper introduces a new method to compare and contrast the bankruptcy rules, the Shapely value and the two proposed rules. The findings suggest that the groundwater‐based rule has the lowest dispersion and is the preferred method for water allocation in the Indus River Basin. The use of the bankruptcy rules, the Shapely value and the two proposed methods has the potential to address the supply–demand mismatches of shared rivers. The proposed framework for selecting the best rule is recommended as an effective tool to facilitate negotiation over practical water allocation within transboundary river basins.