Water investment in Mexico City: contradictory elements preventing investment efficiency

Abstract. The complex connections between environmental and socio-economic variables in the water sector system involve not only ecological changes such as climate change but also a need for changes in socio-economic arenas to reduce the impacts of climate change. It is necessary not only to acknowledge the elements of change but also to understand the constraints preventing change in specific cases. The challenges faced by the water sector in Mexico City, as the world's second largest urban agglomeration with its fast growing population, limited external water sources, depleted aquifers and increased disaster risks, call for urgent measures to resolve the inefficiencies found in the traditional approach to water investment.

This paper explores how far the multiple objectives of different actors involved in water projects are balanced to attain integrated water management. The Santa Catarina Water Supply Project, which is in a highly contentious area because of the limited availability of drinking water, is presented as a case study. The analysis shows that the multiple objectives of the different actors involved, together with an institutional structure that perpetuates a traditional engineering approach, constrain the effective and efficient delivery of water projects.

The institutional analysis development framework (Ostrom, 2006) is used to analyse the arena of investment decision-making in water for Mexico City. Following the notion of institutional arrangements as "incentives and deterrents" (Ostrom, 1976), eight contradictory elements are proposed to illustrate the process by which institutional arrangements, implemented by specific actors with the intention of producing specific outcomes, are inefficient in delivering the expected outcomes, and can even produce negative ones when interacting with other existing formal and informal arrangements determined by other actors. These elements explain both the resilience of the system, which has so far prevented its collapse, and the magnitude of a growing problem that demands change.