ADMINISTRATIVE, INSTITUTIONAL, AND STRUCTURAL CHARACTERISTICS OF AN ACTIVE WATER MARKET1

: Voluntary water transfers through markets have been advocated by many diverse groups as a means to reallocate scarce water supplies in the semi-arid western U.S. Although transfers of water rights have occurred almost since the creation of prior appropriation laws over a century ago, functioning water markets have been very slow to develop and are few in number. The structure, composition, administration and transactions of one of the most well established water markets, shares in the Bureau of Reclamation, Colorado-Big Thompson project, are examined to better understand the institutional and transfer conditions that sustain an active water market. Results from a detailed study of C-BT project records reveal that between 1970 and 1993 there were 2,698 transactions through which over one-third of the project water changed ownership or type of use. Further analysis shows that the transactions involved many individual sellers and categories of buyers with different uses, including agricultural buyers. The transfer activity and efficiency of the C-BT market has lead some to suggest that it be used as a model for other markets. However, because this market has fewer institutional restrictions, a well developed infrastructure and unique market conditions, it will be difficult to transfer this model to other areas without accompanying modifications in water right administration and institutions.