9369 ‎(2)‎

• UCREFRP Catalog Number: 9369
• Author: Colorado Water Workshop.
• Title: 12th & 13th Annual Colorado Water Workshop.
• USFW Year: 1987.
• USFW - Doc Type: Western State College of Colorado.
• Copyright Material: NO

The Role of Water in Regional DeveloplleDt

Water as a "Utility" or a "Catalyst".

Few people lack an op1nlon on the relationship between water availability
and regional economic growth. Until recently, most people believed in the
paradigln of the garden, i.e., all other things being equal, the size of
tomatoes is directly related to how much water is applied to them. Water in
this context is not only essential for growth, it is the limiting growth
nutrient. Government institutions, political leaders, international agencies,
and ordinary citizens all seem to believe deeply in this concept, or at least
they behave as though they do, Investments in water supply systems, whether
for irrigation or municipal and industrial purposes, are justified on the
basis of their positive impact on economic growth. Even those who challenge
the benefi ts of growth usually do so whi Ie conceding that the water--growth
r'elationship is inunutable (Lanun, 1985).

Imp1:i ci t in intuitive models of water driven (or facilitated) growth are
concerns for quality, r'eliability, cost, and rights to ownership. This
combination of attributes, when joined with quantity, establishes the
parameters that determine how water influences the growth equation,

In the intermountain west, the catalytic theory of water has been favored
for more than a century (Foss, 1978), It is embodied in the public
instit.utions of the region, in the rhetodc of t.he region's leaders, and in
the plans of many in the private sector, To be sure, in an urban setting,
water' serves a utilitarian purpose and in agriculture it. is essential. In
cities it goes hand-in--hand with other services and amenities citizens expect;
:in rurul areas it is used in abundance for irrigat:i on. But theories and myths
aside, does the provision of water stimulate a region's economy to any
noticeable degree?

Few would contest the assertion that t.he availabi}j ty of natural
resour'ces has a role in facilitating regional economic gr'owth. Certain
resources may even have to be available at "threshold" levels for gro~th to
occur. Conunon sense suggests water may fit into this category, but testing
the hypothesis with water (or some measure of investment in the water supply
infrastructur'e) produces a different picture, Studies based on empirical data
undermine the growt.h model.

An early st.udy whose conclusion question t.he growth model investigated
the relationship between water availability and industrial location patterns
(Bower, 1964), The study reported that macro--1ocation decisions (i.e.,
balancing interregional advantages) are little affected by water availability.
A short time later, an analysis of regional economic growth if. the United
States from 1950 to 1960 (as measured by employment growth on a county basis)
found that water was not a good explanatory variable in assessing relative
growth rates (Howe, 1968). Water presented neither a bottleneck to growth in
arid and semi-arid areas, nor a stimulus in regions where it was abundant.
Yet another study published only one year later compared personnel income per
unit of water use in agriculture and manufacturing in Arizona and reached
essentially the same conclusion (Martin, 1969). Even in an area as arid as
Arizona, water did not appear to be growth limiting. The authors attributed
this finding to market conditions for land and water, technological

- 10 -