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Abstract
When water entitlement and water sharing systems are mis-specified, that is specified in a
manner that lacks hydrological integrity, inefficient investment and water use is the result.
Using Australia's Murray Darling Basin as an example, this paper attempts to reveal the
economic consequences of entitlement mis-specification. Options for specification of
entitlement and allocation systems in a way that has hydrological integrity are presented.
It is reasoned, that if entitlement and allocation system were set up in this manner the
result would be an efficient allocation regime that would autonomously adjust to climatic
shifts, changes in prices and changes in technology whilst maintaining environmental
integrity.