The Costs of Benefit Sharing: Historical and Institutional Analysis of Shared Water Development in the Ferghana Valley, the Syr Darya Basin

Ongoing discussions on water-energy-food nexus generally lack a historical perspective and more rigorous institutional analysis. Scrutinizing a relatively mature benefit sharing approach in the context of transboundary water management, the study shows how such analysis can be implemented to facilitate understanding in an environment of high institutional and resource complexity. Similar to system perspective within nexus, benefit sharing is viewed as a positive sum approach capable of facilitating cooperation among riparian parties by shifting the focus from the quantities of water to benefits derivable from its use and allocation. While shared benefits from use and allocation are logical corollary of the most fundamental principles of international water law, there are still many controversies as to the conditions under which benefit sharing could serve best as an approach. Recently, the approach has been receiving wider attention in the literature and is increasingly applied in various basins to enhance negotiations. However, relatively little attention has been paid to the costs associated with benefit sharing, particularly in the long run. The study provides a number of concerns that have been likely overlooked in the literature and examines the approach in the case of the Ferghana Valley shared by Kyrgyzstan, Tajikistan and Uzbekistan utilizing data for the period from 1917 to 2013. Institutional analysis traces back the origins of property rights of the transboundary infrastructure, shows cooperative activities and fierce negotiations on various governance levels. The research discusses implications of the findings for the nexus debate and unveils at least four types of costs associated with benefit sharing: (1) Costs related to equity of sharing (horizontal and vertical); (2) Costs to the environment; (3) Transaction costs and risks of losing water control; and (4) Costs as a result of likely misuse of issue linkages.