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Abstract
Entering the 21st century, the world faces a global water crisis threat, due to increasing competition for freshwater which is an implication of economic growth, population growth, and climate change. Therefore, institutions that can secure the availability of water resources sustainably are urgently needed. In contrast to the tendency of research in the last two decades, which was dominated by experimental methods, this research studies local institutions in Bali called Subak using game theory as a reasoning method. Water management was analyzed using three economic frameworks namely, institutions, transaction costs, and contracts, to reveal how water institutions in Bali are managed. This study found that there are strong social norms that can maintain trust, act as a coordinating medium, eliminate transaction costs, and enforce contracts. Furthermore, the study also discusses the failure possibility of the current government intervention system because the capitalist production function alienates the value of water from its production system. Empirical research through experiments is very important, however, economics has a set of theories that can be used to predict or develop incentive mechanisms within an institution. The social norms that were found in this study can be used as a basis for the design of clean water management institutions at the village or community level with public participation.
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References
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- Aryastana, P., Yujana, C. A., & Ardantha, I. M. (2020). Irrigation Water Management by Using Remote Sensing and GIS Technology to Maintain the Sustainability of Tourism Potential in Bali. Journal of Infrastructure & Facility Asset Management, 2(1), 63-72. https://doi.org/10.12962/jifam.v2i1.6965
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- Carvalho, J. P., & Sacks, M. (2021). The economics of religious communities. Journal of Public Economics, 201, 104481. https://doi.org/10.1016/j.jpubeco.2021.104481
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- Deffains, B., & Fluet, C. (2020). Social Norms and Legal Design. The Journal of Law, Economics, and Organization, 36(1), 139–169. https://doi.org/10.1093/jleo/ewz016
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- Yu, T., Chen, S.-H., & Li, H. (2015). Social norms, costly punishment and the evolution of cooperation | Journal of Economic Interaction and Coordination. Journal of Economic Interaction and Coordination, 11, 313–343. https://doi.org/10.1007/s11403-015-0146-8
References
Acemoglu, D., & Jackson, M. O. (2017). Social Norms and the Enforcement of Laws. Journal of the European Economic Association, 15(2), 245–295. https://doi.org/10.1093/jeea/jvw006
Aryastana, P., Yujana, C. A., & Ardantha, I. M. (2020). Irrigation Water Management by Using Remote Sensing and GIS Technology to Maintain the Sustainability of Tourism Potential in Bali. Journal of Infrastructure & Facility Asset Management, 2(1), 63-72. https://doi.org/10.12962/jifam.v2i1.6965
Asian Development Bank. (2020). Asian Water Development Outlook 2020: Advancing Water Security Across Asia and The Pacific. Publication in Asian Development Bank.
Bendesa, I. K. G., & Asti Aksari, N. M. (2018). From Agricultural to Tourism Hegemony A Deep Socio-Economic Structural Transformation. Cambridge Scholars Publishing.
Carvalho, J. P., & Sacks, M. (2021). The economics of religious communities. Journal of Public Economics, 201, 104481. https://doi.org/10.1016/j.jpubeco.2021.104481
Cole, S., & Browne, M. (2015). Tourism and Water Inequity in Bali: A Social-Ecological Systems Analysis. Human Ecology, 43(3), 439–450. https://doi.org/10.1007/s10745-015-9739-z
Deffains, B., & Fluet, C. (2020). Social Norms and Legal Design. The Journal of Law, Economics, and Organization, 36(1), 139–169. https://doi.org/10.1093/jleo/ewz016
Diputra. G. I. S., & Arsha. I. M. R. M. (2023). Identifying Factors Influencing Urbanization in Denpasar City. Jurnal Ekonomi Pembangunan, 21(1), 87-98. DOI: 10.29259/jep.v21i1.19749
Fagan, B., & Durrani, N. (2021). The dawn of everything: A new history? Reviews in Anthropology, 50(3–4), 80–99. https://doi.org/10.1080/00938157.2022.2026612
He, J., Zheng, X., Rejesus, R. M., & Yorobe Jr., J. M. (2019). Moral hazard and adverse selection effects of cost-of-production crop insurance: Evidence from the Philippines. Australian Journal of Agricultural and Resource Economics, 63(1), 166–197. https://doi.org/10.1111/1467-8489.12290
Jayasuriya, S., Sukadana, I. W., Manning, C., & Meydianawathi, L. G. (2020). The tourism boom in Bali: Is it harming prospects for long-term economic growth? Working Paper (No. 2020-01). The Australian National University, Arndt-Corden Department of Economics.
Jespersen, K., & Gallemore, C. (2018). The Institutional Work of Payments for Ecosystem Services: Why the Mundane Should Matter. Ecological Economics, 146, 507–519. https://doi.org/10.1016/j.ecolecon.2017.12.013
Levy, G. (2019). The Intelligent Design of Religious Beliefs. In J.-P. Carvalho, S. Iyer, & J. Rubin (Eds.), Advances in the Economics of Religion (pp. 73–88). Springer International Publishing. https://doi.org/10.1007/978-3-319-98848-1_5
Menard, C., & Shirley, M. M. (2022). Advanced Introduction to New Institutional Economics. The Ronald Coase Institute. Edward Elgar Publishing.
Meran, G., Siehlov, M., & von Hirschhausen, C. (2021). The Economics of Water: Rules and Institutions (p. 301). Springer Nature
Mulyati, M. (2019). SUBAK: Filosofi Keserasian dalam Masyarakat Agraris di Pulau Bali. Jantra, 14(1), 75-82. https://doi.org/10.52829/jantra.v14i1.85
Mussah, I., Boah, D. K., & Seidu, B. (2020). A Comprehensive Review of Solution Methods and Techniques for Solving Games in Game Theory. Journal of Game Theory, 9(2), 25–31. https://doi.org/10.5923/j.jgt.20200902.01
Norken, I. N., Suputra, I. K., & Arsana, I. G. N. K. (2015). Water Resources Management of Subak Irrigation System in Bali. Applied Mechanics and Materials, 776, 139–144. https://doi.org/10.4028/www.scientific.net/AMM.776.139
Pickel-Chevalier, S., Bendesa, I. K. G., & Darma Putra, I. N. (2021). The integrated touristic villages: An Indonesian model of sustainable tourism? Tourism Geographies, 23(3), 623–647. https://doi.org/10.1080/14616688.2019.1600006
Sukadana, I. W., & Saraswaty, A. N. (2014). Experimental Economics on Firm’s Behavior: Entry Game Approach. Jurnal Ekonomi Kuantitatif Terapan, 7(2), 130-136. https://doi.org/10.24843/JEKT.2014.v07.i02.p05
Sunarta, I. N., Nugroho, S., & Adikampana, I. M. (2021). Spatial Transformation of Subak in Northern Kuta Tourism Area, Bali: From Agricultural to Cultural-Service | South Asian Journal of Social Studies and Economics. South Asian Journal of Social Studies and Economics, 9(1), 26–38. https://doi.org/10.9734/sajsse/2021/v9i130229
Thaler, R. H., & Sunstein, C. R. (2021). Nudge: The Final Edition by Richard H. Thaler. Yale University Press.
Windia, I. W., Sudarta, I. W., & Sri Astiti, N. W. (2015). Sistem Subak di Bali (Kajian Sosiologis). Udayana Press.
Yu, T., Chen, S.-H., & Li, H. (2015). Social norms, costly punishment and the evolution of cooperation | Journal of Economic Interaction and Coordination. Journal of Economic Interaction and Coordination, 11, 313–343. https://doi.org/10.1007/s11403-015-0146-8