Magdalena Larreboure (Alesina Seminar)

Speaker & Title

Magdalena Larreboure (Harvard), "Water Allocation and Social Unrest: Evidence from Chilean Water Rights"

Abstract

When water scarcity can be attributed to identifiable actors rather than solely to climatic conditions, affected individuals may be more likely to mobilize in response. I estimate the effects of water rights allocated to commercial uses—primarily agriculture and mining—on water availability and social conflict in Chile. I construct a panel that combines georeferenced surface- and groundwater rights held by more than 50,000 users with streamflow data, complaints filed with the Water Authority, water-theft lawsuits, and protest events, across 80 river basins from 2005 to 2024. To measure competing water allocation, I classify new rights according to whether they are hydrologically connected to each spatial unit, and divide the volume granted by the unit’s renewable flow. This measure exploits river-flow direction and distance from intake points, allowing me to estimate spatial spillover effects. A 10-percentage-point increase in competing allocation reduces annual streamflow by 7.3%. While I find no effect on complaints or water-theft lawsuits, protests increase, particularly those targeting firms. The same increase raises the probability of a protest against firms by 8% relative to its baseline rate. The effect is larger where a greater share of renewable flow is already committed, consistent with more rivalry over the resource driving people to the streets. It is also larger where water rights are concentrated among a few large holders, consistent with concentrated ownership creating visible targets which facilitate collective action. The effect is further amplified during severe droughts.