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Integration in the management of international waters: economic perspectives on a global policy discourse.

In recent years an emergent global policy discourse has promoted the concept of Integrated Water Resources Management (IWRM) as a strategy for the sustainable management of international waters. However, integration remains a considerable challenge in large international river basins. This article addresses the relevance of the global discourse on IWRM, asking how much integration can be expected and how much integration is desirable in international water management. The article presents a novel compilation of eighty-six international river basin organizations and examines their degree of integration in terms of three dimensions: membership, substantive scope, and form. More particularly, the article examines the integration problem from an economic perspective, asking whether integration serves the self-interest of the respective riparian states. The empirical evidence highlights the difficulties of integration, as the majority of international river basin organizations remain narrow in membership and scope. Economic considerations suggest that voluntary cooperation in river basins is institutionally demanding and that the degree of integration depends on the problem at hand. Hence, the challenge for international waters management is to search for the economically desirable degree of integration in each case. Keywords: international river basins, Integrated Water Resources Management, Coase theorem, integration.

The Problem

Some 263 river basins on earth cross international boundaries. (1) Whenever a water resource is international, competing claims over shared waters can generate conflict among riparian countries. In response, a global policy discourse has emerged that promotes Integrated Water Resources Management (IWRM) as a concept for sustainable resource use. IWRM calls for the integrated management of different water uses within the hydrological confines of a river basin. Proponents of IWRM often advocate the establishment of special river basin organizations.

However, a number of social scientists have rejected IWRM as unrealistic with respect to international waters. For example, Frank Marty, basing his predictions on experiences with six bilateral agreements, expects that the majority of international water agreements will be bilateral and narrow in scope and that this is indeed how it should be. (2) John Waterbury warns that the quest for integrated development in international river basins will be elusive and excessively costly, although he concedes that bilateral agreements are not necessarily a solution for multiparty basins. (3) Empirical research suggests that existing arrangements are limited in membership and substantive scope, but large-N analyses are rare and generally limited to the analysis of membership. In terms of membership, Jesse Hamner and Aaron Wolf find that 86 percent of 145 international water treaties concluded since 1945 are bilateral; however, they do not distinguish between bilateral and multilateral basins. (4) According to Ken Conca, Fengshi Wu, and Ciqi Mei, thirty-three of forty-nine international river agreements established in multilateral basins between 1980 and 2000 are bilateral. (5) In terms of substantive scope, Ludwik Teclaff suggests that the majority of international water institutions are single-purpose, but the basis of his analysis is unclear. (6) In terms of form, it is an open question as to what extent riparian states not only conclude agreements but also set up specific river basin organizations. (7)

Hence, only vague knowledge is available concerning integration of existing international river basin institutions in terms of substantive scope and form. How much integration can be expected in the management of international waters? How much integration is desirable in terms of membership, substantive scope, and form? In other words, how viable is the IWRM concept for the management of international rivers?

To address these questions, I discuss in this article IWRM in the light of empirical evidence and economic considerations. I begin by setting out the global policy discourse of IWRM and then present the findings of a review of 506 international water treaties and eighty-six associated organizations. This survey provides a more comprehensive empirical review of the degree of integration in existing international water management institutions in terms of different dimensions of integration, including membership, substantive scope, and form. I next examine economic perspectives on the conditions for voluntary integration within the international system, asking whether integration can be expected to be in the self-interest of riparian states. In the concluding section, I discuss the findings and highlight research and policy implications.

The empirical review discussion confirms that the majority of international river basin institutions are limited in membership and scope, but it also suggests that this majority is smaller than is generally assumed in the literature. The economic analysis suggests that full cooperation in fact cannot necessarily be expected to occur. I conclude that full integration across international river basins is not necessarily desirable but that the challenge is to find the economically desirable degree of integration in any given case.

Global Policy Discourse on Integrated Water Resources Management

Starting with the 1992 International Conference on Water and the Environment, in Dublin, (8) IWRM has been promoted at international environmental and freshwater conferences in Rio de Janeiro (1992), (9) The Hague (2000), (10) Bonn (2001), (11) Johannesburg (2002), (12) Kyoto (2003), (13) and Mexico (2006). (14) IWRM is the central idea of a global policy discourse supported not only by international organizations such as the United Nations and the World Bank, (15) but also by new global actors such as the World Water Council (WWC) (16) and the Global Water Partnership (GWP). (17) The IWRM discourse is what other contributors to this special issue call a "mobius-web style" of global governance. (18)

IWRM has evolved as a response to traditional approaches to water resources management, which relied primarily on narrow engineering and sectoral solutions. (19) The discourse calls for more integrated approaches, both in respect of the resource and among the actors involved. In general, there are different understandings of what is meant by IWRM. (20) A very broad definition is provided by the GWP, which defines IWRM as "a process which promotes the co-ordinated development and management of water, land and related resources, in order to maximize the resultant economic and social welfare in an equitable manner without compromising the sustainability of vital ecosystems." (21)

Often IWRM incorporates the concept of river basin management (RBM), namely, that water resources should be managed in the context of a river basin. RBM is an institutional response to problems of "spatial fit" (22) between hydrological and political boundaries, as indicated on the left side of Figure 1. RBM suggests that water should not be managed at the level of geopolitical entities but at the river basin scale. In the case of international waters, RBM implies that all riparian countries should work together to manage water resources at the basin scale.


Although the concept of RBM has a longer history, (23) it has gained fresh momentum over the last few decades. For instance, since 2000 RBM is a legal requirement of the European Union's Water Framework Directive (WFD). The concept has been supported by natural scientists, lawyers, and often also by economists. (24) For example, Peter Rogers states:
 The general economic prescription to deal with externalities is to
 "internalize" them. The river basin itself is an ideal unit of
 analysis to achieve this goal: it can reasonably be assumed most
 externalities are captured by analysing the river basin as a single
 unit. This is why the concepts of integrated river basin planning and
 the creation of river basin commissions to implement and plan are so
 popular in the economic and planning literature. (25)

A second interpretation of IWRM places greater emphasis on the integration of different water-using sectors, such as water supply and sanitation, industry, agriculture, nature protection, energy, and transport. (26) Water is a multifunctional resource. Competing claims of different water users and water-using sectors create problems of horizontal "institutional interplay," as indicated on the right-hand side of Figure 1. In this case the challenge is to coordinate between different water-using sectors.

To solve problems of fit and problems of interplay, there is often an explicit or implicit assumption that it is desirable to establish new agencies, so-called river basin organizations (RBOs), to institutionalize a river basin management approach. In principle, RBM could also be achieved through other means of coordination, such as freestanding negotiations. This notwithstanding, influential bodies such as the World Commission for Water for the 21st Century clearly advocate RBOs: "If the IWRM principle is adopted, then basin-level systemic management is clearly needed. ... Accordingly, governments should set up management agencies at the basin and aquifer levels." (27)

Hence, IWRM encompasses three dimensions of integration: that of jurisdictions; that of sectors; and that of institutional arrangements. In the case of international rivers, the discourse on IWRM correspondingly points toward three different dimensions of institutional design--namely, membership, substantive scope, and form. Membership is constituted by those riparian states sharing a river basin that sign an agreement. Substantive scope refers to the range of water uses covered by an agreement. Form refers principally to the question of whether riparian states rely on agreements alone or whether they also establish corresponding organizational structures and international secretariats (sometimes also in collaboration with nonstate actors). In this article, the term institution is used as an overarching term referring to the "rules of the game." (28) These rules are often manifested in agreements or contracts and include the constitutional documents of formal organizations.

IWRM has been recommended for international as well as domestic river basins. (29) However, especially in large international river basins, integration tends to entail considerable complexities. In the case of international waters, "integration" cannot be imposed from above but relies on voluntary negotiations among the riparian states (and possibly other actors) that share a river basin. This raises the question whether it is in the interests of the respective riparian states to integrate. Therefore, the following empirical findings and economic analysis will assess the incentives for riparian states to integrate.

Empirical Evidence of Integration in International River Basins

Objectives and Methodology

To determine the impact of the global policy discourse on the current level of integration in international water management, the following empirical analysis examines the degree of integration in existing international river basin institutions. Most existing large-N analyses only consider the membership of agreements. As a result, our understanding of integration arrangements in terms of substantive scope and form remains vague. Therefore, a distinction was drawn between international river basins that merely have international water agreements and basins that also have specific river basin organizations in place. In addition, the identified organizations were analyzed in terms of both their membership and their substantive scope. As such, the analysis seeks better to understand the current practice of riparian countries with respect to the three dimensions of integration already identified: membership, substantive scope, and form.

The analysis is based on three different datasets: (1) the Web-based Transboundary Freshwater Dispute Database (TFDD) of 506 international water agreements concluded between 1820 and 2002; (30) (2) my own compilation of eighty-six international river basin organizations (see the chapter appendix), (31) and (3) a more detailed comparative analysis of twelve organizations in terms of form. The term international river basin organization is used here as an overarching term for any kind of international

organization, commission or committee, or other form of institution responsible for the management of an international river basin or international sections thereof.

The list of eighty-six organizations was compiled by analyzing the agreements contained in the TFDD database. Additional organizations that were established up to 2002 were added from the literature. The compilation of eighty-six organizations is not comprehensive, as it does not include a number of bilateral organizations in the Danube, Rhine, and Po basins. Nor does it cover Soviet-era and colonial organizations. However, the list is fairly comprehensive with respect to international river basins that currently have organizations in place.

In addition, twelve organizations were analyzed in greater detail with regard to form. The twelve selected organizations are:

* German-Czech Commission on Boundary Waters (CBW)

* International Boundary and Water Commission United States and Mexico (IBWC)

* International Commission for the Protection of the Elbe (ICPE)

* International Commission for the Protection of the Rhine (ICPR)

* International Joint Commission Canada and United States (IJC)

* Joint Water Committee Israel and Jordan (JWC ISR-JOR)

* Joint Water Committee Israel and Palestinian Authority (JWC ISR-PAL)

* Mekong River Commission (MRC)

* Nile Basin Initiative (NBI)

* Organization for the Development of the Senegal River (OMVS)

* Permanent Indus Commission (PIC)

* Permanent Water Commission (PWC) Namibia and South Africa

The analysis of form was limited to a dozen cases for the sake of manageability. These twelve were selected because they cover a broad spectrum of forms. Except for the most recently established bodies, many of the agencies listed have been extensively discussed in the literature, and some, such as the ICPR and the IJC, are considered to be comparatively successful examples of transboundary water cooperation.

The TFDD database of 506 agreements and the list of eighty-six organizations were used to analyze the coverage of international basins with agreements and organizations, respectively. The analysis of membership and substantive scope was based on analysis of the eighty-six organizations identified. (For reasons of manageability, I limited the analysis of membership and substantive scope to the eighty-six organizations instead of analyzing all 506 treaties contained in the TFDD.) To get a better understanding of form, the twelve organizations identified were studied in more detail.

Coverage of Basins with Institutions

A count among the 506 TFDD agreements reveals that, by the end of 2002, international water agreements covered 109 out of the 263 existing international river basins on the planet. Thus, at least 42 percent of international basins are covered by treaty. In contrast, only 62 of the 263 (less than a quarter) had international river basin organizations in place.

In terms of form, more than half (56 percent) of the river basins with international agreements also had some form of international organization. In bipartite basins--basins shared by two riparian countries--the coverage with international river basin organizations is 15 percent, while in multipartite basins--basins shared by three or more countries--the level is 41 percent (Table 1). Thus, organizations are more likely to be set up in multipartite than in bipartite basins.
Table 1 International River Basins with River Basin Organizations

 Basins with International River
 Basin Organizations (IRBOs)

 No. of
 River Basins Number Share of Total Share of Basins
 Worldwide per Basin Type with IRBOs

All basins 263 62 0.24 1.00
Bipartite 176 26 0.15 0.42
Multipartite 87 36 0.41 0.58

Source: Ines Dombrowsky, Conflict, Cooperation and Institutions in
International Water Management: An Economic Analysis (Cheltenham, UK:
Edward Elgar, 2007), p. 96.


To assess the membership of existing institutions, the eighty-six international river basin organizations can be broken down into bilateral and multilateral organizations (Table 2). Furthermore, a distinction can be made between basinwide and boundary water organizations. Basinwide organizations are multilateral organizations that include all of the relevant riparian countries. Boundary water commissions are bilateral organizations that address several or all boundary and transboundary waters shared by a dyad.
Table 2 International River Basin Organizations by Membership

 Number Share of Total
Type of Organization Organizations

Total organizations 86 1.00

Bilateral organizations 57 0.66

Multilateral organizations 29 0.34

Basinwide organizations (multipartite basins 7 0.08

Boundary water commissions 20 0.23

Source: Ines Dombrowsky, Conflict, Cooperation and institutions in
International Water Management: An Economic Analysis (Cheltenham, UK:
Edward Elgar, 2007), p. 98.

Table 2 first indicates that not all organizations are related to one single basin, but about a quarter of the organizations identified are boundary water commissions covering more than one river basin. Hence, dyads of riparian countries that share several transboundary rivers at least sometimes set up one organization dealing with all the rivers shared by the dyad instead of one river basin organization per basin as suggested by the IWRM concept.

Table 2 furthermore indicates that of the eighty-six organizations identified, two-thirds are bilateral and one-third multilateral. However, the actual share of existing bilateral organizations is higher, because the list of eighty-six organizations does not cover all existing bilateral commissions. Twenty-nine of the eighty-six organizations are multilateral. These twenty-nine organizations cover eighteen river basins, meaning that at least 20 percent of all eighty-seven multipartite basins worldwide have multilateral organizations in place. Some basins have several multilateral organizations (e.g., the Rhine, Danube, and La Plata). Among the multilateral organizations identified, seven are basinwide (the Amazon, Gambia, Incomati, La Plata, Niger, Schelde, and Umbeluzi). In addition, some sub-basins have sub-basinwide organizations in place (e.g,. in Lake Constance and in the Moselle, Meuse, and Pilcomayo Rivers). In contrast to the IWRM concept, another eighteen of eighty-seven multipartite basins (around 20 percent) have only bilateral organizations in place, and fifty-one of eighty-seven multipartite basins (about 60 percent) have no organization at all. In other words, half of the multipartite basins with organizations have multilateral agencies.

To test whether the IWRM discourse has had any impact on the membership of international river basin organizations, an analysis was conducted to determine whether the participation ratio, defined as the relationship of member states to total riparian states in a river basin, had increased since 1980. (32) However, no linear relationship was found between the participation ratio and the founding year. This finding suggests that the IWRM discourse had no statistically significant impact in the 1980-2002 period on the participation ratio of the relevant organizations. (33)

This notwithstanding, attempts are under way in a number of basins to establish basinwide arrangements. Because the EU Water Framework Directive calls for basinwide management, basinwide arrangements have recently been set up for international rivers in Europe. Efforts to establish basinwide arrangements have also been pursued in southern Africa under the Water Protocol of the Southern African Development Community (SADC). In 2000, the four riparian states of the Orange basin established the Orange-Senqu River Commission. In 2003, the Limpopo Watercourse Commission replaced the basinwide Limpopo Basin Permanent Technical Commission of 1986. In 2004, the Zambezi Watercourse Commission was set up as a basinwide cooperation mechanism in the Zambezi basin. (34)

In many of the well-known multilateral river basin organizations, membership has historically been limited to a subset of riparian countries e.g., in the Rhine, Mekong, and Ganges-Brahmaputra-Meghna basins). For instance, in the Mekong basin, China's participation in the Mekong River Commission would be critical as China pursues major river development plans upstream. (35)

Substantive Scope

To assess the substantive scope of international water institutions, the agreements pertaining to the eighty-six identified organizations were first reviewed for the uses covered. Figure 2 shows how frequently twelve different issues were mentioned in the treaties pertaining to the eighty-six organizations analyzed. (36) The issue most frequently mentioned in treaties is water quality (36), followed by water quantity (35), ecology (26), flood control (18), and navigation (18).
Figure 2 Frequency of Issues Mentioned in River Basin Treaties

Water quality 36
Water Quantity 35
Hydropower 29
Ecology 26
Flood control 18
Navigation 18
Irrigation 16
Economic development 16
Infrastructure 13
Fishing 11
River regulation 11
Other 33

Source: Ines Dombrowsky. Conflict, Cooperation and Institutions in
International Water Management--An Economic Analysis (Cheltenham, UK:
Edward Elgar, 2007), p. 103.

Note: Table made from pie chart.


In a second step, the range of issues covered by the agreements pertaining to the eighty-six organizations was analyzed. Table 3 lists the number of agreements by the number of issues. It shows that a third (35 percent) of the agreements address a single purpose. While 60 percent of the agreements cover up to two issues, 40 percent include more than three issues, and 21 percent cover more than five. One agreement covers a total of twelve issues.
Table 3 International Water Agreements by Number of Issues Covered
Number of Issues

 [less than [less than [greater [greater l2(=Max)
 or equal or equal than than
 to] 1 to] 2 or equal or equal
 to] 3 to] 5

Number of 30 52 34 18 1

of total
(N=86) 0.35 0.60 0.40 0.21 0.01

Source: Ines Dombrowsky, Conflict, Cooperation and Institutions in
International Water Management: An Economic Analysis (Cheltenham, UK:
Edward Elgar, 2007), p. 104.

Thus, Teclaff's assumption that the majority of international water agreements are single-purpose cannot be supported by these findings. (37) Instead, a majority of organizations (60 percent) cover up to two issues. The obvious reason that it is more than one issue is that many water uses are related. For example, most treaties that pertain to water quality also consider ecological issues. Many hydropower agreements also make reference to water quantity or flood control. A number of organizations moreover cover a broader range of water uses. Hence, overall, the analysis confirms that a majority of respective agreements are limited in substantive scope and are not as broad as suggested by the IWRM concept; however, they are still more integrated than suggested by Teclaff.


To analyze the form of existing institutions, twelve organizations were examined in more detail. Table 4 indicates which of the twelve organizations have a hierarchy of organs (i.e., several organs in a hierarchical relationship) and which have international secretariats in place. At one end of the continuum are organizations with a hierarchy of decisionmaking bodies and international secretariats in place. At the other end are intergovernmental commissions and committees that serve as negotiation forums without any formal administrative support. The majority of organizations analyzed consist of several organs, and five have an international secretariat. The two North-American boundary water commissions (IJC and TBWC) take an intermediate form, as each state involved has its own secretariat. Hence, the analysis shows that there is wide variation of organizational forms.
Table 4 Forms of International River Basin Organizations

Organizational Feature (out of 12) Organizations

Hierarchy of organs 10 A1l but PIC, PWC
International secretariat 5 OMVS, ICPR, ICPE, MRC, NBI

Economic Perspectives on Integration in international River Basins

The empirical review of the degree of integration of existing international river basin institutions raises the question of explaining the outcomes. One way to analyze the problem of integration in international water management is to take an economic perspective on the incentives for integration. This implies analyzing the problem of integration in terms of benefit and cost considerations. Of course, the process of integration has a political as well as economic nature; hence, when explaining policy outcomes, other factors such as the power differentials, ideas, or windows of opportunity may also come into play. (38) This notwithstanding, it can be argued that the likelihood of integration around river basins is small if integration does not benefit the respective actors involved. Thus, an economic analysis provides a strong analytical structure for considering the integration problem. Furthermore, beyond this explanatory power, an economic perspective with a welfare emphasis adds a normative dimension to the analysis, helping determine what is desirable for society as a whole--or in this case the community in a river basin. As such, an economic approach also offers a basis for refining policy prescriptions.

The following analysis considers to what degree, if any, integration in the management of international waters can be expected on the basis of rational self-interested behavior by state parties. The objective is to explore the transboundary cooperation and integration potential that would occur if the respective states behaved in a rational and self-interested manner. The assumption is that IWRM relies on some form of voluntary cooperation, since the international system lacks an external entity that could impose IWRM. Cooperation may occur both among different actors, in order to allow for a management at the river basin scale, and among different water-using sectors, in order to ensure an adequate intersectoral coordination. Since, as indicated in the previous section, agreements pertaining to international river basins are normally negotiated among states, the following analysis assumes that the actors involved are governments of riparian countries. (39) The analysis of membership and substantive scope draws on the economic theory of externalities and on noncooperative game theory, while the analysis of the form of integration draws on transaction cost economics.

From an economics perspective, transboundary water problems can be described as unidirectional externality problems. An externality is present whenever the production or consumption activities by one actor have direct, nonprice mediated effects on the production or consumption activities of another actor. Externalities imply a Pareto inefficient allocation of scarce resources, meaning that another allocation would make at least one party better off without making any other party worse off. Thus, the question is how these external effects can be internalized in a transboundary setting.

According to the Coase theorem, an internalization of external effects and the realization of gains from cooperation are possible through voluntary bilateral negotiations on the basis of a side payment if property rights are well defined and if transaction costs are sufficiently low. (40) Coase assumed that all rights were either with the harming (upstream) or with the harmed (downstream) party, which in the case of international waters would correspond to the doctrines of absolute territorial sovereignty or absolute territorial integrity in international water law. (41) Transaction costs may include information, bargaining, monitoring, and enforcement costs. (42)

The Coase theorem implies that cooperation is conceivable in principle in the case of negative unidirectional externalities, and that prima facie we may expect treaties on the basis of side payments. However, these underlying conditions do not apply a priori in the international system, since no external authority exists to define property rights to international waters, to solve problems of information, and to enforce international agreements. (43) This implies that the internalization of externalities through side payments relies on an implicit or explicit agreement on property rights by the parties involved and on overcoming possible information, bargaining, monitoring, and enforcement problems. As an alternative to monetary side payments, states may rely on issue linkages as side payments in kind, and it has been suggested that this may help overcome image problems associated with side payments. (44) Overall, the Coase theorem raises the question of what the implications are for the expected degree of integration in terms of membership, substantive scope, and form.


The Coase theorem implies that the institutional prerequisites for cooperation in the management of international waters are already demanding in bilateral negotiations. It can be argued that cooperation is even more difficult to achieve in multiparty negotiations. Even in reciprocal externality problems (so-called Prisoner's Dilemma games), cooperation cannot necessarily be expected if more than two parties are involved, but the minimum and maximum number of signatories that can be expected to sign an agreement depends on the underlying cost and benefit functions. (45) This implies that the expected degree of integration in terms of membership cannot be determined in general but depends on the underlying cost and benefit functions. This would have to be further developed for upstream-downstream settings with more than two riparian countries. (46)

Substantive Scope

In terms of the substantive scope of international water institutions, it can be argued that the integration of different water uses can be expected to be in the interests of riparian states to the extent that opportunities for the linkage of different complementary water uses exist. In this case, the externality problem would be solved by an issue linkage within the water sector. In transboundary settings, three different types of such intra--water sector linkages can be distinguished. (47) First, changes in water uses by the upstream riparian state (e.g., in terms of decreased water abstraction or pollution) can be linked to changes in water uses by the downstream user (e.g., in terms of improved navigability or river continuity for fish). Second, changes in water uses with downstream effects (e.g., in terms of water pollution) can be linked to changes in water uses with upstream effects (e.g., a dam flooding upstream). Third, in some cases, two riparian countries share more than one river basin and at the same time hold reversed riparian positions in the respective basins. For instance, on the Colorado River, the United States is upstream and Mexico is downstream; on the Tijuana River, Mexico is upstream and the United States is downstream. In such cases, the riparian states may link the negotiations in the two basins. Thus, in principle, some opportunities for the linkage of different water uses exist, but they remain limited. Therefore, in terms of substantive scope as well, full integration cannot necessarily be expected to be in the rational self-interest of the players involved.

It should be noted that the substantive scope of international water agreements must not be limited to different water uses, but agreements may also be based on linkages between the water issues and issues in other policy fields, such as trade issues.


With respect to the rationale for setting up organizations, transaction cost economics (TCE) argues that "hierarchies" may be the most efficient mode of organization, comparatively speaking, if bounded rationality and opportunistic behavior are assumed. (48) Bounded rationality assumes that individuals intend to behave rationally but in practice do so only to a limited degree, given that they usually do not have all relevant information and given that their cognitive abilities are constrained. (49) Opportunistic behavior implies that actors may be willing to use guile in the pursuit of their self-interest. (50) The consequence is that under certain conditions the ex ante and ex post transaction costs to negotiate and implement contracts may be high, and a contract may no longer be the most efficient governance structure. Instead, it might be expedient to move to more integrated forms of organization. In TCE, these hierarchical governance structures include the private firm, public sector regulation, or the public agency. The problem of applying TCE to international water management is that the hierarchical governance structures apply to private sector and domestic policy problems and do not represent direct structural alternatives for international water problems. (51)

Still the question remains whether the establishment of a formal international organization in general, and of an international secretariat in particular, is economically desirable in international water management. The central argument for setting up an international organization is to institutionalize the negotiation process. In addition, the purpose of an international secretariat would be to manage information, bargaining, and monitoring problems by supporting the identification of technically feasible and mutually agreeable solutions and by monitoring implementation. (52) At the same time, the establishment of a secretariat involves costs for permanent staff and offices. Thus, whether the establishment of an international secretariat is deemed expedient depends on its expected benefits and costs.


The above theoretical considerations show that if (bounded) rational self-interested behavior is assumed, cooperation--and consequent integration--in the management of international waters remains challenging, and full integration in terms of membership, substantive scope, and form cannot necessarily be expected. More specifically, riparian states can be expected to integrate as long as the benefits of integration exceed the costs. The theory explains certain outcomes under the assumption that states behave in a (bounded) rational way and maximize their utility. The normative content of game theory analysis is limited to the recommendation to realize gains of cooperation where such gains exist--that is, if a Pareto improvement is possible. As such, the theory implies that the expected degree of integration depends on the problem at hand.

With respect to policy implications, it should be noted that the expected outcome of voluntary negotiations under an actor-centered or game theory perspective is not necessarily equivalent to the optimal outcome under a social planning or welfare economic perspective. The latter would seek to maximize the aggregated benefits for the society in the basin as a whole. Given that externalities are an expression of an inefficient allocation of scarce resources, it can be argued from a social planning perspective that the economically desirable degree of integration in a river basin is a function of the spatial reach of the externalities involved. According to this perspective, all affected parties should have a seat at the negotiation table. Note that even this social planning perspective does not support a general imperative to integrate, but that what may be considered as the economically desirable degree of integration depends on the case at hand.


This article has analyzed the relevance of global policy recommendations on IWRM in international water management in the light of empirical evidence and economic considerations. The IWRM discourse calls for an integrated management of water resources in terms of membership and substantive scope and often recommends the establishment of river basin organizations. Yet the analysis presented finds that a scenario of full integration is neither likely nor necessarily desirable from an economic point of view.

The empirical analysis reveals a mixed picture with respect to the integration of existing water management institutions. In terms of coverage, institutional arrangements are by no means universal, and riparian states some times--but not always--set up organizations beyond mere treaties. In terms of membership, the majority of international river basin organizations are bilateral; however, if multipartite basins only are considered, half of basins with organizations have multilateral organizations in place. This indicates a higher degree of integration than that generally suggested in the literature. This point notwithstanding, the number of truly basinwide organizations remains small. At the same time, a recent trend toward basinwide agreements can be observed in Europe and in southern Africa. In terms of substantive scope, again the analysis shows a slight majority of organizations that are comparatively narrow, but also a number of organizations that are quite broad. Furthermore, existing organizations vary greatly in terms of their form. As such, the empirical review confirms that the majority of international water management institutions are limited in membership and scope, but this majority appears to be smaller than has been previously suggested.

The question is how these empirical findings can be interpreted and evaluated. Is the existing practice satisfactory, or is there scope for change? What, if any, are the implications of these findings for the discourse on IWRM?

Economic analysis of the integration problem cautions that if integration in water resources management relies on voluntary cooperation--such as in the case of international rivers--it remains institutionally challenging. International cooperation is even more difficult to achieve if more than two riparian states are involved. In terms of substance, there may be some scope to link complementary water uses, but the opportunities to do so remain limited. In terms of form, the creation of an organization may reduce transaction costs, but it also imposes other costs. As such, the economic analysis laid out here suggests that the expected degree of integration in terms of membership, substantive scope, and form cannot be predicted in general but depends on the benefits and costs of integration in any given case. Furthermore, from a normative welfare theory point of view, it can be argued that the economically desirable degree of integration may be beyond what can be expected on the basis of individual rational self-interested behavior, but still depends on the underlying case, and that full integration is not necessarily required.

On the one hand, it can be argued that economic theory provides a potential explanation of the empirical results, in the sense that full integration cannot necessarily be expected on the basis of economic considerations. On the other hand, the empirical evidence cannot be considered as a test of the theory, as we do not know which considerations played a role in the design of the respective arrangements and how cost-benefit calculations came into play. To test the explanatory power of the theory presented, the considerations prompting the establishment of the respective arrangements would have to be studied in detail. However, this exercise would entail a major research effort of its own.

Furthermore, the data presented here do not permit a judgment on whether existing arrangements reflect an economically desirable level of integration. In fact, some existing arrangements may not be sufficiently integrated to prevent conflict. Others may go very far in terms of integration but may not necessarily be effective. Hence, no direct policy prescriptions can be drawn from this empirical evidence. For that it would be necessary to analyze the effectiveness of the respective institutional arrangements.

However, in light of the economic considerations, it can be argued that, with respect to the global policy discourse on IWRM in international water management, the challenge is not necessarily to seek integration per se, but to seek an economically desirable degree of integration. As such, the economic view also puts into perspective previous rejections of the IWRM concept in the social sciences.
Appendix List of International River Basin Organizations (established

International No Organization Year No Issue
Rliver Basin of Founded of Areas
TFDD Basin Member
classification) State States

Amazon 8 Amazonian Cooperation 1978 8 3

Amur 4 Joint Committee on 1994 2 6
 Transboundary Waters

Aral Sea 8 Interstate Council for 1993 5 2
 the Aral Sea

Asi/Orontes 3 Joint Technical 1994 2 2

Candelaria 2 International Borders 1987 2 2+
 and Waters Commission

 Coatan Achute 2

 Grijalva 2

 Hondo 2

 Suchiate 2

Colorado 2 International Boundary 1889/ 2 7+
 and Water Commission 1944

 Rio Bravo/ 2
 Rio Grande

Tijuana 2

Columbia 2 International Joint 1909 2 8+

 Fraser 2

 Mississippi 2

 Nelson- 2

 St. Croix 2

 St. John 2

 St. Lawrence 2

Danube 17 Danube Commission 1948 8 1+

 International 1994 12 6
 Commission for the
 Protection of the
 Danube River

 International Sava 2002 4 2+
 River Basin

 Austrian-Bavarian 1950 2 1
 Power Plant Company
 Kraftwerke AG)

 Multiple bilateral

Daugava 4 Ad hoc International 1997 3 1
 Zapadnaya Dvina/
 Daugava River

Douro/Duero 2 Joint Commission 1927/ 2 1

Guadiana 2 Spanish-Portuguese 1968 2 2+
 International Border

 Lima 2 Joint Commission for 1998 2 2+
 the Protection and
 Use of
 Hydrological Basins

 Mino/Minho 2

 Tagus/Tejo 2

Elbe 4 International 1990 2 2+
 Commission for the
 of the Elbe

 German-Czech 1974/ 2 7+
 Commission on 1995
 Boundary Waters

Fenney 2 Joint Committee of 1985 2 1
 Experts 1986

Karnaphuli 3

Gambia 3 Gambia River Basin 1978 3 1

Ganges- 6 Coordination Committee 1954 2 4
 for the Kosi Project

 Brahmaputra- Indo-Bangladesh Joint 1972 2 2+
 River Commission

 Meghna Joint Committee 1977/ 2 2
 (Farakka agreements) 1996

 Mahakali River 1996 2 4

Garonne 3 Joint Commission, 1958/ 2 2
 Joint Supervisory 1970

 Commission of Mixed 1963 2 2
 Technical Experts

Helmand 3 Helmand River Delta 1950 2 1

Incomati 3 Tripartite Permanent 1983 3 2+
 Technical Committee

 Joint Water 1992 2 3+

 Komati Basin Water 1992 2 2

Indus 5 Permanent Indus 1960 2 4+

Jordan 5 Joint Syro-Jordanian 1953/ 2 3
 Commission 1987

 Joint Water Committee 1994 2 3

 Joint Water Committee 1995 2 3

La Plata 5 Salto Grande Joint 1946 2 5
 Technical Commission

 Intergovernmental 1967/ 5 4
 Coordinating 1969
 Committee of the
 River Plate Basin
 Countries (CIC)

 Uruguay River 1975 2 3+
 Management Commission

 Coordinating 1980/ 2 4+
 Commission 1983

 Joint 1958 2 2+
 Technical Commission

 Brazilian-Paraguayan 1967/ (2) 2
 Join! Technical 1973 3
 Commission, 1979
 ITAIPU as binational
 electricity entity

 Mixed Commission 1991 2 8+

 Binational 1995 2 6+

 Tri-national 1995 3 1
 Commission (or the
 of the Riverbed of
 the Rio Pilcomayo

Lagoon 2 Joint Commission for 1963/ 2 2+
Mirim the Development of 1977
 the Mirim Lagoon

Lake 9 Lake Chad Basin 1964 4 4+
Chad Commission

Lake 3 Joint 1955/ 2 4
Titicaca Peruvian-Bolivan 1957

 Binational Authority 1993 2 1

Limpopo 4 Tripartite Permanent 1983 3
(a) Technical Committee

Mekong 6 Committee for 1957/ (3) 8
 Coordination of 1978 4
 Investigations 1995
 of the Lower Mekong
 for Coordination of
 Investigations of
 the Lower
 Mekong Basin/Mekong
 River Commission

Narva 4 Joint 1997 2 1+
 Commission on the
 Protection and
 Rational Use of

Neman 5 Permanent Working 1995 2 1+
 Group for the
 Protection of
 Watercourses and
 International Lakes

Nestos 2 Greek-Bulgarian Joint 1994/ 2 1+
 Programming and 1995
 Follow-up Committee

Niger 11 Niger River Basin 1964/ 9 9+
 Commission/ 1980
 Niger Basin 1987

 Joint Technical 1988 2 1

 Nigeria-Niger Joint 1990/ 2 1+
 Commission for 1999

Nile 10 Joint Permanent 1959 2 1
 Technical Committee

 Nile Basin 1999 9 10+

 Organisation for the 1977/ 4 12+
 Management and 1981
 Development of the
 Kagera River Basin

 Regional Policy and 1994 3 5
 Steering Committee
 (Lake Victoria)

Ob 4 Joint Commission 1992 2 1+

Oder/Odra 4 Permanent Commission 1992 2 8
 on Boundary Waters

 International 1996 3 2+
 for the Protection of
 the Oder River from

Okavango 4 Okavango River Basin 1994 3 1
 Water Commission

Orange (b) 4 Joint Permanent 1986/ 2 7+
 Technical Commission/ 1999
 Lesotho Highlands
 Water Commission,
 Lesotho Highlands
 Development Authority,
 Tunnel Authority

 Permanent Water 1992 2 3+

Po 4 Mixed Commission for 1972 2 1
 the Protection of
 Waters against
 (Italy, Switzerland)

 Multiple bilateral

Rhine 9 Central Commission for 1815/ 5 1+
 the Navigation on the 1868

 International 1963/ 5 4+
 Commission for the 1999
 Protection of the

 International 1960 4 2+
 Commission for the
 Protection of Lake

 International 1994/ 5
 Commission 2002
 for the Protection
 of the Meuse against
 Commission for the

 International 1961 3
 Commission for the
 Protection of the

 International 1961 2
 Commission for the
 Protection of the Saar

 International 1892/ 2 2
 Commission for the 1936
 Regulation of the
 Rhine/Joint Rhine

 Multiple bilateral

Rhone 3 International 1962 2 1
 for the Protection of
 the Waters of
 Lake Geneva
 against Pollution

 Permanent Commission 1967 2 1

 Lake Leman Council 1987 2 5+

Schelde 3 International 1994 3 1+
 Commission for the
 Protection of the
 Schelde against

 Tripartite Standing 1950 3 1
 Committee on Polluted

Senegal 4 Organization for the 1972/ 3 8
 Management of the 1978/
 Senegal River 1982

Struma 4 Permanent 1959 2 1

Tana 2 Finnish-Norwegian 1980 2 1
 Boundary Waters

Tigris-Euphrates 6 Joint Technical 1989 2
Shatt al Arab Committee

 Permanent Technical 1975 2 2

 Mixed Iranian-Iraqi 1975 2 1

Tome 3 Finnish-Swedish 1971 2 6
 River Commission

Umbeluzi 3 Tripartite Permanent 1983 3 2+
 Technical Committee

Zambezi 9 Zambezi River 1987 2 1

Notes: (a.) Not included: Limpopo Basin Permanent Technical Commission
(est. 1986, 4/4 riparians). (b.) Not included: Orange-Senqu River
Commission (est 2000, 4/4 riparians).


Ines Dombrowsky is a senior researcher in the Department of Economics of the Helmholtz Centre for Environmental Research UFZ, Leipzig, Germany. She is the author of Wasserprobleme im Jordanbecken (1995) and Conflict, Cooperation and Institutions in International Water Management (2007). She also has several years of practical work experience on transboundary water management with the German Technical Cooperation (GTZ) and the World Bank.

(1. ) Aaron T. Wolf, Jeffrey A. Natharius, Jeffrey J. Danielson, Brian S. Ward, and Jan K. Pender, "International River Basins of the World," International Journal of Water Resources Development 15, no. 4 (1999): 387-427; UNEP, Atlas of Inter national Freshwater Agreements (Nairobi: United Nations Environment Programme, 2002).

(2. ) Frank Marty, The Management of International Rivers: Problems, Politics and Institutions (Frankfurt: Peter Lang, 2001).

(3. ) John Waterbury, "Between Unilateralism and Comprehensive Accords: Modest Steps Toward Cooperation in International River Basins," International Journal of Water Resources Development 13. no. 3 (1997): 279-289.

(4. ) Jesse Hamner and Aaron T. Wolf, "Patterns in International Water Resource Treaties: The Transboundary Freshwater Dispute Database," Colorado Journal of International Environmental Law and Policy, 1997 Yearbook (Boulder: Colorado Law. 1998).

(5.) Ken Conca, Governing Water: Contentious Transnational Politics and Global Institution Building (Cambridge: MIT Press, 2006); Ken Conca, Fengshi Wu, and Ciqi Mei, "Global Regime Formation or Complex Institution Building? The Principled Content of International River Agreements," International Studies Quar terly 50 (2006): 263-285.

(6.) LudwikA. Teclaff, "Evolution of the River Basin Concept in National and International Water Law," Natural Resources Journal 36 (1996): 359-392.

(7. ) For an overview of a range of forms and functions of existing river basin organizations and commissions, see Stephen McCaffrey, "International Water courses," in Rene-Jean Dupuy, ed., Manuel sur les organisations Internationales/A Handbook on International Organizations (Dordrecht: Martinus Nijhoff Publishers. 1998): 725-751.

(8.) ICWE, International Conference on Water and the Environment: Development Issues for the 21st Century, Dublin, 26-31 January 1992, Conference Report (Geneva: World Meteological Organization, 1992).

(9.) UNCED, United Nations Conference on Environment and Development, Rio de Janeiro, 3-14 June 1992, Agenda 21 (New York: United Nations, 1992), avail able at (accessed 23 August 2005).

(10.) WWC, Second World Water Forum and Ministerial Conference, The Hague, 17-22 March 2000, Final Report (Marseilles: World Water Council, 2000), available al (accessed 11 September 2002).

(11.) German Federal Government, International Conference on Freshwater, Bonn, 3-7 December 2001, Ministerial Declaration, The Bonn Keys, Recommendations for Action (Bonn: Lemmens Verlags & Mediengesellschaft mbH, 2001).

(12.) UN, Report on the World Summit on Sustainable Development. Johannesburg, South Africa, 26 August-4 September 2002, UN Doc. A/CONF. 199/20 (New York: United Nations, 2002).

(13.) WWC, Ministerial Declaration: Message from the Lake Biwa and Yodo River Basin, March 23, 2003 (Marseilles: World Water Council, 2003), (accessed 28 November 2006).

(14.) WWC, 4th World Water Forum Ministerial Declaration, Mexico City, March 22, 2006 (Marseilles: World Water Council, 2006), available at (accessed 17 May 2006).

(15.) See, for instance, World Bank, Water Resources Management. A World Bank Policy Paper (Washington, DC: World Bank, 1993); and World Bank, Water Resources Sector Strategy: Strategic Directions for World Bank Engagement (Washington, DC: World Bank, 2004).

(16.) The World Water Council is a nonprofit nongovernmental umbrella organization established in 1996. Together with a host country it organizes the World Water Forum every three years; see (accessed 29 August 2005).

(17.) The Global Water Partnership (GWP), established by the World Bank, the United Nations Development Programme, and the Swedish International Development Agency in 1996, seeks to support countries in the sustainable management of water resources; see (accessed 29 August 2005).

(18.) See Claudia Pahl-Wostl, Joyeeta Gupta, and Daniel Petry in this issue.

(19.) See, for instance, Volkmar Hartje, "International Dimensions of Integrated Water Management," in Ismail Al Baz, Volkmar Hartje, and Waltina Scheumann, eds., Co-operation on Transboundary Rivers (Baden-Baden: Nomos, 2002), pp. 7-34.

(20.) See, for instance, Walter Huppert, "Was ist IWRM?--Pladoyer fur ein differenziertes Verstandnis des Konzepts Integriertes Wasserressourcen-Management," in Susanne Neubert et al., eds., Integriertes Wasserressourcen-Management (IWRM): Ein Konzept in die Praxis uberfuhren (Nomos: Baden-Baden, 2005), pp. 61-82; or Conca "Governing Water." Conca also shows how IWRM has remained a subject of contestation over time.

(21.) GWP, Integrated Water Resources Management, GWP Technical Advisory Committee Background Papers No. 4 (Stockholm: Global Water Partnership, 2000), p.22.

(22.) Oran R. Young, The Institutional Dimensions of Environmental Change: Fit, Interplay, and Scale (Cambridge: MIT Press, 2002).

(23.) See, for instance, Ludwik A. Teclaff, The River Basin in History and Law (The Hague: Martinus Nijhoff Publishers, 1967); and Allen V. Kneese and Blair T. Bower, Managing Water Quality: Economics, Technology, Institutions (Washington, DC: Johns Hopkins University Press and Resources for the Future, 1968).

(24.) See, for instance, Malcolm Newson, Land, Water and Development: River Basin Systems and Their Sustainable Management (London: Routledge, 1992); Peter Rogers, "International River Basins: Pervasive Unidirectional Externalities," in Partha Dasgupta, Karl-Goran Maler, and Alessandro Vercelli, eds., The Economics of Transnational Commons (Oxford: Carendon Press, 1997), pp. 35-76; Stephen McCaffrey, The Law of International Watercourses: Non-navigational Uses (Oxford: Oxford University Press, 2001); and Claudia W. Sadoff, Dale Whittington, and David Grey, Africa's International Rivers. An Economic Perspective (Washington, DC: World Bank, 2002).

(25.) Rogers, "International River Basins," p. 45; emphasis in original.

(26.) See, for instance, GWP, Integrated Water Resources Management; and World Bank, Water Resources Sector Strategy.

(27.) Ismail Serageldin et al., "A Report of the World Commission on Water for the 21st Century," Water International 25, no. 2 (2000): 290.

(28.) Douglass C. North, Institutions, Institutional Change and Economic Performance (Cambridge: Cambridge University Press, 1990).

(29.) For further details, see Ines Dombrowsky, Conflict, Cooperation. and Institutions in International Eater Management--An Economic Analysis (Cheltenham, UK: Edward Elgar, 2007), chap. 1.

(30.) See (accessed 1 April 2004). The database excludes treaties concerning navigation, fishing rights, and borders unless water as a resource is also mentioned. A count on 1 April 2004 revealed 506 treaties, including general agreements and regional conventions.

(31.) For further details, see Dombrowsky, Conflict, Cooperation and Institutions in International Water Management, annex 2.

(32.) The year 1980 was chosen as a start year in order to see whether the year 1992 marked a change in trend.

(33.) Overall these findings on membership are generally in line with those of Conca et al., who analyzed the participation ratio of forty-nine international river agreements (not organizations) established between 1980 and 2000. See Conca, Wu, and Mei, "Global Regime Formation or Complex Institution Building?"

(34.) See Lars Wirkus and Volker Boge, Afrikas Internationale Flusse und Seen. Stand und Erfahrungen im grenzuberschreitenden Wassermanagement in Afrika an ausgewahlten Beispielen, Discussion Paper 7/2005 (Bonn: Deutsches Institut fur EntwickIungspolitik, 2005); and Anthony R. Turton, A Critical Assessment of the Basins at Risk in the Southern African Hydrological. Complex. CSIR Report ENV-P-CONF 2005-001, Council for Scientific and Industrial Research (CSIR), 2005.

(35.) Greg Browder and Leonard Ortolano, "The Evolution of an International Water Resources Management Regime in the Mekong River Basin," Natural Resources Journal 40, no. 3 (2000): 499-531.

(36.) The eighteen different issues include those used in the TFDD database and others that were added during the review of the treaties, as deemed appropriate.

(37.) Teclaff, "Evolution of the River Basin Concept in National and International Water Law."

(38.) Authors who have theorized the formation of international water regimes include David G. LeMarquand, International Rivers. The Politics of Cooperation (Vancouver: Westwater Research Center, University of British Columbia, 1977); Thomas Bernauer, "Managing International Rivers," in Oran R. Young, ed., Global Governance: Drawing Insights from the Environmental Experience (Cambridge: MIT Press, 1997), pp. 155-195; Frank Marty, The Management of The Management of International Rivers: Problems, Politics and Institutions (Frankfurt: Peter Lang, 2001); and Stefan Lindemann, Water Regime Formation in Europe: A Research Framework with Lessons from the Rhine and Elbe River Basins, FU-rep 04-2006 (Berlin: Forschungsstelle fur Umweltpolitik, Freie Universitat Berlin, 2006).

(39.) Foreign policy itself is, of course, the outcome of complex domestic policy processes; see Robert D. Putnam, "Diplomacy and Domestic Politics: The Logic of Two-Level Games," International Organization 42, no. 3 (1988): 427-460. Furthermore, in some basins, such as the Rhine basin, private actors also became involved in international water negotiations; see Rainer Durth, Grenzuberschreitende Umweltprobleme und regionale Integration: Zur Politischen okonomie von Oberlauf-Unterlauf-Problemen an internationalen Flussen (Baden-Baden: Nomos, 1996). This notwithstanding, the analysis in this article also indicates that there appears to be a considerable difference between the mobius-web style of governance at the global level (see Claudia Pahl-Wostl, Joyeeta Gupta, and Daniel Petry in this issue) and a rather state-centered regional governance style at the level of International river basins.

(40.) Ronald Coase, "The Problem of Social Cost," Journal of Law and Economics 3 (1960): 1-44.

(41.) See McCaffrey, The Law of International Watercourses.

(42.) Coase, "The Problem of Social Cost," p. 15.

(43.) Scott Barrett, "Building Property Rights for Transboundary Resources," in Susan S. Hanna, Carl Folke, and Kari-Goran Maler, eds., Rights to Nature: Cultural, Economic, Political, and Economic Principles of Institutions for the Environment (Washington, DC: Island Press, 1996), pp. 265-284.

(44.) See, for instance, Karl-Goran Maler, "International Environmental Problems," Oxford Review of Economic Policy 6, no. 1 (1990): 80-107.

(45.) Scott Barrett, Environment and Statecraft: The Strategy of Environmental Treaty-Making (Oxford: Oxford University Press, 2003), p. 280f.

(46.) For an initial attempt, see Barrett, "Building Property Rights for Transboundary Resources."

(47.) For further details, see Dombrowsky, Conflict, Cooperation and Institutions in International Water Management, chap. 6.

(48.) See, for instance, Oliver E. Williamson, "Comparative Economic Organization: The Analysis of Discrete Structural Alternatives," Administrative Science Quarterly 36, no. 2 (1991): 269-296; and Oliver E. Williamson, "Public and Private Bureaucracies: A Transaction Cost Economics Perspective," Journal of Law, Economics, and Organization 15, no. 1 (1999): 306-342.

(49.) Herbert A. Simon, Models of Man (New York: John Wiley, 1957).

(50.) Oliver Williamson, The Economic Institutions of Capitalism (New York: Free Press, 1985).

(51.) For further details, see Dombrowsky, Conflict, Cooperation and Institutions in International Water Management, chap. 7.

(52.) Ines Dombrowsky, "Integriertes Wasserressourcen-Management als Koordinationsproblems," in Susanne Neubert et al., pp. 61-82.
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Date:Oct 1, 2008
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