A management model is presented that may be useful in analyzing decision rules for the conjunctive management of groundwater reserves for use in irrigation and salinity control. Alternative schemes for decentralized management via taxes and bribes are discussed. Taxes are described that bring about intradistrict efficiency in terms of water use and salinity control when downstream externalities are ignored. When externalities are considered, it is shown that a unique pattern of resource use requires a given institutional structure for the management of bribes.
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Cummings et al. (1974) studied this question.
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