水资源短缺经济学

11261 The Economics of Water Scarcity Jon FrostCarlos MadeiraSerafín Martínez Jaramillo Finance, Competitiveness and InvestmentGlobal DepartmentNovember 2025 A verified reproducibility package for this paper isavailable athttp://reproducibility.worldbank.org,clickherefor direct access. Policy Research Working Paper11261 Abstract In many countries around the world, water scarcity couldbecome a macroeconomically relevant concern. As a keyinput into production processes (agriculture, power gen-eration, and industrial use) and a common good, waterresources risk being overexploited. Regressions with paneldata for 169 countries between 1990 and 2020 show that,while water use is positively correlated with output, higherwater scarcity is associated with lower gross domestic prod-uct growth and investment, and higher inflation. In contrast, water use efficiency is associated with higher gross domesticproduct growth and lower inflation. Climate scenarios showrisks of much more severe water shortages in the future,threatening its sustainable use. This could impose highercosts on individual sectors and on the economy, reducingoutput and pushing up prices. Water availability and usecould thus become an area for economists and central banksto monitor in the context of climate change, economicforecasting and monetary policy. This paper is a product of the Finance, Competitiveness and Investment Global Department. It is part of a larger effort bythe World Bank to provide open access to its research and make a contribution to development policy discussions aroundthe world. Policy Research Working Papers are also posted on the Web at http://www.worldbank.org/prwp. The authorsmay be contacted at jon.frost@bis.org, cmadeira@bcentral.cl, smartinezjaramil@worldbank.org. A verified reproducibilitypackage for this paper is available athttp://reproducibility.worldbank.org, clickherefor direct access. The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about developmentissues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry thenames of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely thoseof the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank andits affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent. The economics of water scarcity Jon Frost, Carlos Madeira and Serafín Martínez Jaramillo1 Keywords: water scarcity; efficiency; tragedy of the commons; climate change; natural resources.JEL classification: I95; Q25; Q50. Economist, Central Bank of Chile, carlosmadeira2009@u.northwestern.edu 1.Introduction Fresh water is a necessity for human, animal and plant life and a crucial input into various sectors ofeconomies around the world. Water availability is essential for agriculture, mining, manufacturingand human capital activities (Islam and Hyland, 2019). Economic activity can be disrupted by eitherextreme rainfall (Kotz et al, 2022), drought or excessive water withdrawal (Zaveri et al, 2023). Already,around 60% of humanity lives in areas with water stress for at least part of the year (Mekonnen andHoekstra, 2016; He et al, 2021). Over 85% of people affected by dry shocks live in low- or middle-income countries (Damania et al, 2017), with women being particularly affected (Carr et al, 2024).While the overall volume of water on earth is fixed, and water availability remains stable on averagein arable lands, rapid changes in freshwater availability are affecting regions with large populations(Carleton et al, 2024). Furthermore, there has been a decline in available water quality across severalareas (Jones et al, 2024; Li et al, 2024) and across several dimensions, including blue water (surfaceand groundwater), green water (soil moisture) and water quality (Liu et al, 2025). This paper examines the economics of water scarcity and its macroeconomic implications. Westart with a descriptive discussion of water scarcity issues in the Americas – a region with substantialfreshwater resources, but substantial heterogeneity in water use and scarcity measures. We thenexamine the impact of water scarcity on output growth, investment and inflation across a globalsample of economies. Finally, we discuss future scenarios based on recent climate projections. We contribute to the literature by assessing the economic effects of water scarcity – a topicthat has received relatively little attention in macroeconomic research. We first document waterresources, daily use and scarcity for the Americas. We then propose a simple Cobb-Douglas modelfor how water use and water scarcity affect production even after accounting for traditional factorssuch as capital and labour. W