Water Management Policy in California: The Status Quo of Command-And-Control

Abstract

Using Olson’s 1965 logic of collective action and group theory, we argue that the “small group” of the “iron triangle” is able to collectively act to push for command-and-control regulations in Californian water policy. There are individual rent-seeking incentives in the small group because the politicians do not want to impose tax, and they would like to have short-term development and economic growth during their term in order to gain a positive reputation from the public or to get re-elected. The developers would like more work and prestige and the water bureaucrats have little incentive to limit development and alienate politicians. However, by focusing on command-and-control (CAC), the citizens may end up paying more to fund these projects. CAC is easier to hide than environmental taxes which are more explicitly shown to citizens. Thus, the ignorant majority is exploited by the knowledgeable minority. Thus, the small group of the iron triangle defends the status quo at the expense of the citizens and the public interest at large.