Markets and misfits in adaptive water governance: how agricultural markets shape water conflict and cooperation

Agricultural trade poses dilemmas for adaptive water governance as farmers and irrigation systems become integrated into global food value chains and are affected by their ongoing dynamics. The benefits and risks of agricultural trade and agrarian transitions are unevenly distributed, giving rise to complex interdependencies and externalities. Despite these growing linkages, the understanding of agricultural markets and their influence on water conflict and cooperation remains limited and dependent on context, which can lead to seemingly contradictory evidence. Progress has been hampered by boundary problems, disputed concepts, measurement issues, and divergent normative perspectives. Addressing these challenges will require that water governance scholars account more explicitly for agricultural trade when diagnosing collective action problems and assessing different modes of adaptive water governance. Drawing on the common-pool resource governance literature, we distinguish three separate, but interrelated, conceptual perspectives examining agricultural trade as an external factor in water governance: (1) market integration as a disturbance, (2) market integration as an opportunity, and (3) agricultural trade as a form of telecoupling with nested externalities. We compare these perspectives in terms of the externalities involved, their major claims about the relationship between market integration and collective action in the context of irrigation governance, and the broader implications for adaptive water governance. The comparison demonstrates the prevalence of institutional misfits and the common struggle of boundary shifting, i.e., matching water governance to the expanding problem-shed associated with agricultural markets. Institutional fit offers one important lens through which to consider the shifting boundaries (and actors) relevant for water governance, the scope and limits for strengthening fit through social learning, and the importance of nested governance to address nested externalities. These insights point the way for an agenda of research that examines the evolution of agricultural trade and adaptive water governance and pays explicit attention to the politics and power relations that shape who wins and loses and the different levers and entry points to improve management of the associated transitions and trade-offs. We conclude by arguing that future research should identify and examine pathways of adaptive water governance that strengthen processes of social learning and institutional nesting to address the external pressures and opportunities created by global food value chains.