Achieving Groundwater Governance: Ostrom's Design Principles and Payments for Ecosystem Services Approaches

Abstract Groundwater is a largely unseen common pool resource. Yet, driven by strong economic incentives, whether or not encouraged by existing policies, and the difficulty to exclude others, groundwater users are competing with each other to extract as much as possible, with devastating consequences for its sustainability. The challenges faced for sustainably managing such common pool resources, on which people have established de facto individual rights, are manifold. However, creating a market for trades of some kind in ecosystem services associated with groundwater could actually enhance the protection of this critical resource on the basis that protection can benefit individual groundwater users economically as well as provide a broader public good. This article uses Elinor Ostrom's design principles as an analytical tool to examine how market-based approaches such as payments for ecosystem services (PES) fit with some of the governance models that could be used to protect and enhance groundwater as a common pool resource. It argues that while there are specific design challenges to be overcome, PES as an institutional tool can align with Ostrom's ideas for the governance of groundwater.