Networks of Coordination and Conflict. Governing Electricity Transactions for Irrigation in South India

Patterns of coordination and conflict emerge when providing and maintaining large technological systems. The electrical ‘networks of power’ for irrigation are mediators between groundwater extraction and agricultural production, embedded in regulation, the polity, and social relations. In India, groundwater has become essential for food security and climate adaptation but has been overexploited via electricity, which itself became subject to political instrumentalization and inefficient utilization. Built on a transaction-centered institutional framework, this book develops a set of linked game-theoretic models, based on primary survey and interview data, to capture the political economy of electricity subsidization in Andhra Pradesh and its resulting micro-economic interaction patterns. Public choice analysis reveals why subsidization emerged along with party competition and electoral alignment and how the policy persisted, despite de jure independent regulation. Subsidization has incurred debts for both the state and utilities, resulting in reduced infrastructure maintenance, to which farmers have adapted with non-standard pumps, further deteriorating infrastructure conditions. Simultaneous investments into demand-side measures could improve power quality and reduce repair costs. Both strategies are individually rational, but the socially optimal equilibrium is subject to a coordination threshold. Coordination is impeded, however, by several linked action situations, including evolved technology adoption strategies, a dilemma of infrastructure capacity appropriation and load demand through excessive groundwater exploitation. Accounting for existing physical and social networks of coordination and conflict is crucial for policies to succeed. The unfolding economic theory of action-situation networks expanded upon here opens paths towards integrating the ubiquitous ecology of interrelated and contingent action situations.