Collective decision-making under drought:
An empirical study of water resource management in Japan

Kaori Tembata
Kenji Takeuchi
December 2016
Discussion Paper No.1646

GRADUATE SCHOOL OF ECONOMICS
KOBE UNIVERSITYROKKO, KOBE, JAPANCollective decision-making under drought:
An empirical study of water resource management in Japan
Kaori Tembata ∗Kenji Takeuchi†

Abstract
The management of common-pool resources requires collective action and cooperation,
especially when resource users face extreme weather events. This study examines collective decision-making in water resource management during droughts. By focusing on
the drought response by groups of water users in river basin communities in Japan, weinvestigate the determinants of collective decisions on water withdrawal restrictions. Our
main finding suggests that water user groups are more willing to cooperate for water conservation when other water user groups in a community also cooperate. Moreover, we
examine the impact of climate variability on drought management. Our findings show thatdrought-related weather patterns lead to more stringent water restrictions, suggesting thatclimate change may pose a threat to the management of the water supply.

Keywords: Common-pool resource; Collective decision-making; Cooperation;
Drought; Water conservation; JapanJEL Classification: D70; Q25; Q54∗ Graduate School of Economics, Kobe University, Japan. E-mail: kaoritembata@gmail.com† Graduate School of Economics, Kobe University, Japan. E-mail: takeuchi@econ.kobe-u.ac.jp1

1

Introduction
Researchers have shown that groups of individuals are capable of overcoming social dilem-

mas and maintaining common-pool resources (CPRs). Traditional economic theory predicts
that, without government intervention or privatization, resource users who face collective action
problems overuse or even exhaust their common resources. This situation eventually leads towhat Hardin [11] describes as “the tragedy of the commons.” Many studies have challenged
this assumption and found evidence of cooperation in the management of CPRs [18, 22]. Suchevidence suggests that individuals can sustain collective action and self-organize CPRs overtime. For example, theoretical work and laboratory experiments have provided explanations
for cooperative action and other-regarding behavior from the viewpoint of social preferences[5, 6, 8, 9, 23]. Field studies from many parts of the world have also identified a variety ofsocial, economic, and ecological factors that are likely to aﬀect successful or unsuccessful CPR
management [1, 2, 4, 7, 26, 28].
This paper presents an example of CPR management by focusing on river basin communities
under drought conditions in Japan. Although Japan receives relatively abundant precipitation,
droughts occur regionally almost every year. In the event of a drought, water users in river
basin communities organize the council in order to coordinate water use and impose joint
water restrictions. This unique, user-based management system for drought response in Japan
provides an opportunity to explore an interesting case of CPR management.
The objectives of this study are twofold. First, we examine which factors aﬀect collective
decision-making in water resource management during a drought. While most previous CPR
studies have explored the behavior of individuals to explain its impact on community resource
management, our study focuses on interactions among the groups of resource users in a community and the collective decisions that these groups make in drought management. Unlike
fishery or irrigation, water resource management involves several diﬀerent groups of stakeholders that most likely face a dilemma in using their water resources. Given this feature of CPR
management, our particular interest in this study is the ways in which cooperation is enhanced
among water user groups that jointly implement water restrictions during a drought. Thus, weinvestigate the characteristics associated with the CPR that may aﬀect collective decisions andpromote cooperation in community drought management.
Second, our study examines the impact of weather variability on water resource management.

2

Climate change is now largely acknowledged as a cause of extreme weather events including
drought. According to the Fifth Assessment Report of the Intergovernmental Panel on Climate
Change (IPCC), it is projected that climate change will cause the frequency and duration ofdroughts to increase in some parts of the world by the end of the 21st century [17]. In its national
plan for climate change adaptation, the Japanese government also emphasizes the impacts ofdrought on water use and resource management in local communities [13]. Therefore, it
is important to take into account the impact of climate change in the context of droughtmanagement. The empirical model of this study allows us to investigate whether particularweather variability aﬀects the water restrictions implemented by councils for drought response.
The result is informative for allowing policymakers to understand how water withdrawals could
be regulated because of climate change.
The main result of this study shows that water user groups are more likely to cooperate withregard to water conservation when other water user groups also cooperate. Thus, our finding
suggests that the level of cooperation depends on other groups’ cooperation in the context
of drought management. In addition, our study shows the eﬀects of climate variability on
drought response. We find that the drought-related precipitation patterns used in our analysis
are correlated with water restrictions. This finding suggests that climate change may cause
water resource management problems for a community.
The remainder of the paper is organized as follows. The next section presents an overview
of the drought situation in Japan and the responses of local communities during a drought. The
hypotheses of the study are also presented in this section. Section 3 describes the data used inour empirical analysis. Section 4 shows the results, and Section 5 concludes.
2
2.1

Background
Drought in Japan
Despite relatively abundant rainfall and annual typhoons, Japan experiences droughts, as inmany other parts of the world. Almost every year, droughts occur in various parts of Japan,
resulting in water shortages in local communities. Drought-vulnerable areas are located mostly
in the central and western parts of the country, including Tokyo and many other cities with large
populations and economic power. Table 1 provides details of the most severe droughts that haveoccurred in Japan during the past 50 years. The table shows droughts by year, together with3

Table 1. Major severe droughts in Japan
Year

City

Mandatory restrictions on domestic water use
Duration (days)

1964
1967

1973

1978

1987

1994

2005

Tokyo
Kitakyushu
Chikushino
NagasakiMatsueOtake
Takamatsu
Naha etc.
Osaka etc.
Kitakyushu
Fukuoka
Tokyo etc.
Gamagori etc.
Tokai etc.
Takamatsu
Matsuyama
SaseboFukuoka
Anan etc.
Toyohashi
Takamatsu etc.
Yamatokoriyama

84
130
22
72
135
49
58
239
161
173
287
71
274
188
67
123
213
295
77
33
72
78
61

PeriodJuly 10
June 19
Sept. 5
Sept. 25
June 20
July 27
July 13
Nov. 21
Sept. 1
June 8May 20June 16
Aug. 24
Sept. 12
July 11
July 26
Aug. 1
Aug. 4
Apr. 26
Aug. 3June 15
June 22
June 27-

Oct. 1
Oct. 26
Sept. 26
Dec. 5
Nov. 1
Sept. 13
Sept. 8
Sept. 24, 1974
Feb. 8, 1979
Dec. 11Mar. 24, 1979
Aug. 25
May 23, 1988
Mar. 17, 1988
Sept. 30
Nov. 25
Mar. 5, 1995
May 31, 1995
July 12
Sept. 4
Aug. 25
Sept. 7
Aug. 26

Source: Japanese Ministry of Land, Infrastructure, Transport, and Tourism, 2014 [16]the names of the most aﬀected cities. The right-hand columns present details of the mandatory
restrictions on domestic water use implemented by water supply utilities. As shown in Table 1,
droughts occurred locally in most cases and had severe impacts on the aﬀected regions.
Among these extreme events, Japan suﬀered its worst drought in 1994. Because of therecord-breaking high temperature and low precipitation, the 1994 drought caused widespread
damage across the country. As a result of the restrictions placed on domestic water use,approximately 16 million people experienced mandatory cutbacks of water use [12]. The
drought conditions were more severe and persisted for months in some regions, including
the cities listed in Table 1. For example, the cities of Sasebo and Fukuoka in the westernpart of Japan adopted water use restrictions for 213 days and 295 days, respectively. The
drought also had negative eﬀects on the country’s economy. In the agricultural sector, crop
damage amounted to approximately 138 billion yen.1 In the industrial sector, 77 industrial water
utilities, which comprised one-third of all such utilities, curtailed water use during the drought.
1 One billion yen was approximately US$9.35 million at the end of 1994. Thus, 138 billion yen was approxi-

mately US$1.29 billion.

4

As a consequence of water shortages, firms experienced a temporal shutdown and a decline
in production. Furthermore, the drought caused environmental damage to the water systemsuch as water quality degradation in rivers and land subsidence due to excessive groundwater
pumping. The experience in 1994 shows that drought can have significant social, economic,
and environmental impacts.
2.2

Drought response
In terms of drought response, local communities in Japan address the issues in a unique way.

When a drought occurs, the members of river basin communities bring themselves together toimplement a user-based drought response. Water users, together with river administrators andgovernment agencies, form a drought coordination council, at which they discuss water use
among diﬀerent user groups within the river basin. Among the actions taken in response to adrought, the council implements water restrictions to reduce water use. The interesting featureof such drought management in Japan lies in the coordination role that the council plays duringa drought. The council encourages water users to engage in the decision-making process fordrought management. This also means that the water restrictions implemented by the council
are associated with collective action by water users in river basin communities.
The implementation of a council for drought response dates back to the 1970s. In 1974,
the former Japanese Ministry of Construction issued a notification about drought management[15].2 The notification promoted the implementation of drought coordination councils in river
basin communities facing the risk of drought. Since then, communities have begun to organize
councils in response to droughts. Such councils play an important role in drought management
by facilitating communication and information sharing through interactions among multiple
stakeholders. Although participation in the council depends on the community in question,
councils generally consist of stakeholders such as water user groups (e.g., domestic and industrial
water utilities, groups of farmers, electric power companies), river administrators (the Ministryof Land, Infrastructure, Transport, and Tourism, prefectures, municipalities), local prefecturesand municipalities, and other related administrative agencies (Japan Water Agency, the Ministryof Land, Infrastructure, Transport, and Tourism, the Ministry of Agriculture, Forestry, andFisheries, the Ministry of Economy, Trade, and Industry).
2 The Ministry of Construction, together with the National Land Agency, the Hokkaido Development Bureau,

and the Ministry of Transport, was reorganized into the current Ministry of Land, Infrastructure, Transport,
and Tourism in 2001.

5

The origin of drought coordination councils may also date back to the River Act establishedin 1964.3 Article 53 of the River Act provides for the coordination of water use during a drought.
According to Article 53, water users shall hold consultations in order to coordinate water use
among users in circumstances whereby a drought hinders water utilization. Water users arealso required to respect each other’s water use with regard to the aforementioned water use
coordination. Thus, the law not only encourages collective action but also promotes a specificattitude among water users toward drought management. Further, Article 53 specifies the rolesof water users and river administrators in drought management. While water users coordinate
water use during a drought, river administrators may assist water users in reaching agreements
as necessary. This implies that water users should play a major role in the decision-making
process, whereas river administrators should act as mediators. Based on these provisions in theRiver Act, river basin communities can conduct self-organized drought management.
In the drought coordination council, participants make collective decisions on water restrictions as an important component of their drought response actions.4 Specifically, water users
impose rates of reduction on water withdrawals from upstream dams. In cases of multipurpose
dams that provide water for domestic, agricultural, and industrial water uses, these restriction
rates are implemented simultaneously for each type of water use. Figures 1a and 1b present the
restriction rates of the water withdrawals associated with domestic, agricultural, and industrial
water in each drought that occurred in Japan between 1983 and 2013. Figure 1a compares thewater restriction rates for domestic and agricultural water. In some cases, the same restriction
rates are applied to these water uses. In other cases, however, diﬀerent restriction rates areapplied to each type of water use. A similar tendency is observed when comparing domestic
and industrial water restriction rates, as shown in Figure 1b. These restriction rates do not
originate from individual decisions by each water user group, but from the collective decisionsof the drought coordination council. In other words, water user groups act together to curtailwater use as a part of their response to a drought. Hence, the drought coordination council
implements water restrictions as a result of collective decision-making by water user groups.

3 The former River Act, which had lasted since 1896, was replaced by the 1964 River Act. A major amendment

was made in 1997.
4 Note that the water restrictions introduced in this section are diﬀerent from the mandatory restrictions on

domestic water use mentioned in Section 2.1, which were adopted by domestic water supply utilities. The
restrictions explained here apply to water withdrawals from dams and rivers.

6

100

90

90

80

80

Domestic water restriction rate (%)

Domestic water restriction rate (%)

100

70
60
50
40
30
20
10

70
60
50
40
30
20
10

0

0
0

10

20

30

40

50

60

70

80

90

100

0

Agricultural water restriction rate (%)

10

20

30

40

50

60

70

80

90

100

Industrial water restriction rate (%)(n=207)(n=207)a. Agricultural and domestic water restriction rates

b. Industrial and domestic water restriction rates

Figure 1. Water withdrawal restriction rates

2.3 Hypotheses
Our study focuses on water restrictions during a drought. It examines the collective action ofwater user groups in river basin communities when they impose restrictions on water withdrawals
from upstream dams. As mentioned in Section 2.2, water user groups from diﬀerent sectors
jointly implement water withdrawal restrictions. In such situations, collective action for droughtmanagement should require cooperation among water user groups. In this study, we assume thatwater restrictions reflect the level of cooperation for water conservation, given that the severityof the drought is controlled for. Building upon this assumption, we analyze the characteristics
related to the resource systems that may aﬀect the implementation of water restrictions. Thus,
the hypotheses of this study are as follows:
H1. A water user group cooperates more for water conservation when other water user groups
sharing water resources in their river basin community also cooperate.
H2. Cooperation improves when water is provided for a larger variety of purposes in a community.
H3. Communities that have longer experiences of water resource management cooperate more
for water conservation.

7

H4. Water restrictions are less strict when a river basin community has larger reservoir storage
capacities.
H1 is based on previous research on participants’ behavior in CPR management [3, 7].
Cavalcanti et al. [3], for instance, examine the eﬀect of contributions by others on one’s
willingness to contribute to the management of more sustainable fisheries. They find thatparticipants are more willing to contribute to the implementation of management proposals when
they believe that others also contribute. This finding suggests that many fishers are conditionallycooperative; in other words, people increase their level of cooperation as others cooperate more
[10]. Evidence of such behavior is also shown in the study by Fehr and Leibbrandt [7], who
conduct field experiments in fishing communities. Their results, derived from public goods
games, suggest that the level of contribution depends on how much a fisher expects other fishers
to contribute. In the context of our study, evidence of conditional cooperation should be found
if a water user group cooperates with other water user groups, provided that these groups also
cooperate.
H2-H4 examine the characteristics of the resource system that might be important for successful CPR management [21]. In this study, we use the attributes of dams as the characteristics
because water user groups share water resources from dams located upstream in the river basin.
H2 is included to investigate the eﬀect of group size. Larger groups often cause collective action
problems because of the higher transaction costs of reaching agreements and monitoring eachother’s behavior [4, 28]. For example, Cox and Ross [4] find that smaller irrigation communities
are associated with better crop production. However, as Ostrom [21] points out, the way inwhich group size aﬀects the interactions and outcomes of CPR management depends on the
resource systems and their contexts. With regard to dam management, dams provide water
resources for various purposes. The management of multipurpose dams involves more stakeholders with diﬀerent resource use interests. In the event of a drought, each water user groupsharing water from the same reservoir must take into account other groups in regard to wateruse. In addition, free-riding is less likely to occur in our case because water users collectively
curtail water withdrawals by imposing restrictions via the council. Thus, we hypothesize that
more purposes may lead to cooperation among water user groups in order to prevent water
shortages.
H3 focuses on the relationship between resource use and users. Through the longer experiences of using and managing a common property, members of communities can build trust8and learn about the resource system on which they depend [20]. Consequently, these factors
could contribute to cooperation among users, thereby leading to successful CPR management.
Moreover, the reason for this hypothesis lies in the drought coordination council discussed in
Section 2.2. The council provides water user groups with opportunities for communicationand discussion to coordinate water use during a drought. In the context of CPR management,
face-to-face communication aﬀects collective action in a way that enhances cooperation among
resource users [19]. This is because such interactions enable resource users to adopt joint
strategies to pursue the optimal outcomes. Further, communication helps resource users develop norms and shared values [20]. Thus, longer experiences of water resource management
may have a positive impact on cooperation during a drought.
H4 is related to the physical characteristics of the resource system that may aﬀect water
resource management. Intuitively, if a larger amount of water is regularly stored in a reservoir,communities would be able to maintain their regular water use and be less aﬀected by a water
shortage when a drought occurs. In other words, communities with greater reservoir storage
capacities are less vulnerable to drought. Therefore, the severity of water restrictions should besmaller for larger reservoir storage capacities.
To examine the hypotheses above, we should control for the severity of drought in theestimation. Therefore, we include one of the following climate variables related to drought: thenumber of dry days, the precipitation ratio, and annual precipitation. The coeﬃcients of thesemeteorological variables can be interpreted as how communities respond to climate change
in the management of water resources under drought conditions. Thus, we propose the fifth
hypothesis:
H5. Climate variability has an adverse eﬀect on the management of water resources.
Climate variability and further climate change alter global and regional weather patterns,
causing more frequent and severe droughts. In particular, changes in precipitation patterns
directly aﬀect drought conditions. Figure 2 gives an example of such changes in Japan. The
figure shows that the annual number of rainy days, which are days with a precipitation amountof more than 1 mm, has decreased in recent decades. In other words, the number of dry days isincreasing over time, implying that the duration of dry periods is also increasing. The current
trend is likely to continue because the number of dry days in Japan is projected to increase [14].
Indeed, Japan may face more severe droughts in the coming years.
9

Rain days with precipitation ≥ 1 mm (day)

150
140
130
120
110
100
90
80
1900

1910

1920

1930

1940

1950

1960

1970

1980

1990

2000

2010

Year
Rain days

Five-year moving average

Note: Figures are the mean values taken from 51 observatories in Japan.
Source: Japan Meteorological Agency

Figure 2. Annual days of rain in Japan

As climate change becomes a growing concern, all levels of government have been implementing adaptation strategies to reduce vulnerability and build adaptive capacity to climatechange. In November 2015, the Japanese government released its National Adaptation Plan
to address a wide range of environmental and socioeconomic issues associated with climatechange [13]. In this report, droughts are raised as one of the major concerns for the country’s
water resource management. Because of climate change, the frequency, intensity, and durationof droughts are projected to increase. Therefore, the eﬀect of climate variability should be taken
into account to address drought.
3
3.1

Empirical Analysis
Data
This section presents the variables used in our empirical analysis. To test the hypotheses,

we use the water restriction rate for domestic water as the dependent variable. The independent
variables and corresponding hypotheses are: the other two types of water restriction rates (H1),
the number of purposes of a dam (H2), the operation period of a dam (H3), the reservoir
capacity of a dam (H4), and the three types of climate variability (H5). We also include four
control variables that are categorized into two groups: dam management characteristics anddomestic water user group characteristics. Table 2 describes the variables used in our analysis
10Table 2. Variable descriptions and expected eﬀects
Variable

Description

Domestic water restriction rate
Agricultural water restriction rate
Industrial water restriction rate
Purposes of dam
Dam operaion

Water withdrawal restriction rate for domestic water
Water withdrawal restriction rate for agricultural water
Water withdrawal restriction rate for industrial water
Number of purposes for which a dam provides water resources
Operation period of a dam: number of years after the construction ofa dam at the time a drought occurredReservoir capacity for operating purposes
Annual number of days with precipitation of less than 1 mm
Ratio of annual precipitation to the mean annual precipitationfrom 1981 to 2010
Amount of annual precipitation
Dummy variable, water restrictions are jointly implemented onwater withdrawals from multiple dams: 0 = no, 1 = yes
Dummy variable, the river basin in which a dam is located is subject tothe national government policy for water resources: 0 = no, 1 = yes
Average daily amount of water distribution among domestic water users
Price of domestic water charged per 10 m3 for bore diameters of 13 mm

Reservoir capacity
Dry days
Precipitation ratio
Precipitation
Multiple dams
Full Plan
Domestic water distribution
Domestic water price

Expected eﬀect
N/A
+
+
+
+
+
+
+
-

and summarizes the expected eﬀect of each variable on the domestic water restriction rate.
Table 3 provides descriptive statistics of these variables.
The primary variables of interest in this study relate to collective decisions on water restrictions during droughts. These variables are the domestic water restriction rate, agricultural
water restriction rate, and industrial water restriction rate. As described in Section 2.2, wateruser groups that share the same water resource jointly implement restrictions by imposing rates
of reduction on water withdrawals from dams. They set restriction rates for each type of watersupply via collective decisions made by the drought coordination council. The data on water
restrictions were collected from the annual report, Water Resources in Japan, published by theJapanese Ministry of Land, Infrastructure, Transport, and Tourism. From this data source, wewere able to obtain records on regional droughts in Japan for a 30-year period from 1983 to
2013. Among more than 400 available cases, we use 207 cases of water restrictions for multipurpose dams that supply water for domestic, agricultural, and industrial uses. The descriptive
statistics in Table 3 show that the mean restriction rate for domestic water is 16%. The mean
restriction rates for agricultural and industrial water are greater than those of domestic water,
26% and 27%, respectively.
The variables used to test H2-H4 are related to the characteristics of resource systems.
Data on these variables were obtained from the Dam Yearbook, published by the Japan Dam
Foundation. The oﬃcial websites of the dams were also used as supplementary data sources.
Purposes of dam indicates the number of purposes for which a dam provides water resources.
There are eight categories for the purposes of dams in Japan, including the three types of water11

Table 3. Descriptive statistics
Variable

Unit

Mean

Std. Dev.

Min

Max

Domestic water restriction rate
Agricultural water restriction rate
Industrial water restriction rate
Purposes of dam
Dam operation
Reservoir capacity
Dry days
Precipitation ratio
Precipitation
Multiple dams
Full Plan
Domestic water distribution
Domestic water price%%%purposeyear
100 million m3
day
%
mm
dummy
dummy
1,000 m3
yen

16.16
26.09
27.33
4.90
27.12
1.37
245.6090.39
1,697.76
0.39
0.68
1,312.15
1,267.44

14.00
19.63
19.15
1.04
9.31
2.12
17.75
19.54
570.200.49
0.47
1,907.79
226.62

0
0
0
3
2
0.016
154
49.78
661
0
0
3
770

75
100
93
6
48
19
306
206.73
3,912
1
1
7,962
2100

supplies mentioned above.5 We use multipurpose dams that have these three types of watersupplies to test H1 in this study. Therefore, the minimum number of purposes is three, while themaximum number is six. On average, the dams in our sample have approximately five purposes
for their water use.
We use dam operation to measure the operation period of dams as the variable to test H3.
We calculate how many years have passed since the completion of the dam at the time eachdrought occurred. In our sample, the mean operation period is approximately 27 years. Thatis, during the sample period from 1983 and 2013, river basin communities had, on average, 27
years of dam management experience when they implemented water restrictions.
The variable that relates to H4 is reservoir capacity. This represents the volume of waterthat a reservoir can hold for operating purposes. Reservoir capacity varies widely from 1.6
million m3 to 1,900 million m3 , depending on the dam. This is because some cases of water
restrictions involve more than one dam. We calculate the total reservoir capacity in cases whenwater restrictions were applied to multiple dams. This diﬀerence in water management between
cases that involve multiple dams and those with a single dam is also examined in the analysis,
as we explain in more detail later in this section.
With regard to climate variability for H5, we examine three alternative variables associatedwith the severity of drought: dry days, precipitation ratio, and precipitation. Dry days aredefined as the number of days with precipitation of less than 1 mm. A situation in which there
5 Besides domestic, agricultural, and industrial water supplies, other purposes of dams in Japan are controlling

floods, generating hydroelectric power, stabilizing water flow, supplying water for snowmelt control, andproviding facilities for recreation.

12

are many days without rain is likely to cause a drought and may even lead to severe conditions.
Therefore, this precipitation pattern may be relevant to the level of water restrictions. We expectthat more dry days exacerbate a drought, thereby resulting in the implementation of a higher
water restriction rate. Another weather-related variable is the precipitation ratio. We define theprecipitation ratio as the ratio of annual precipitation to the mean annual precipitation between
1981 and 2010. When there is higher precipitation compared with the average year, droughts
are likely to be less severe. Thus, we expect the precipitation ratio to be negatively related to
the water restriction rate. The other variable is the amount of precipitation. Since precipitationsuch as rain and snow contributes to the recharging of reservoirs, the amount of precipitation
is likely to aﬀect the occurrence of drought. We use annual precipitation in order to capture
the overall tendency for drought severity throughout a year. We expect higher precipitation to
mitigate a drought, thereby reducing the water restriction rate. The data on these meteorologicalvariables were taken from the online database of the Japan Meteorological Agency.6 From thisdatabase, we collected data from the available observatories that are geographically closest toeach dam’s location.
Our analysis includes four control variables: multiple dams, Full Plan, domestic water
distribution, and domestic water price. The former two variables belong to the dam management
characteristics and the latter two belong to the domestic water user group characteristics. The
dummy variable multiple dams distinguishes joint water restrictions on multiple dams fromwater restrictions on individual dams. In some regions, several dams in the same river basin are
managed together regularly or only during a drought. Communities in these regions convene
the drought coordination council and implement joint water restrictions on their dams. We
use this variable to examine the systematic diﬀerence in the collective decisions applied tomultiple dams and a single dam. If water restriction rates are jointly implemented on multiple
dams, the value is one; otherwise, the value is zero. The variable implies that some regions
have more complex management systems in terms of collective action. Assuming that the joint
implementation of water restrictions reflects the higher level of cooperation in a river basin
community, we can expect a higher water restriction rate to be imposed in cases that involve
multiple dams.
We also examine a variable related to the national government policy for water resource use.
Governmental organizations are one of the influential factors in CPR management. Contrary
6 http://www.jma.go.jp/jma/indexe.html.

13

to the adverse impact of government interference often recognized in CPR studies, Zhang et al.
[28] show the positive eﬀects of a top-down approach on irrigation water productivity. Theyfind that the involvement of an upper-tier water users association in farmers’ crop choices leads
to higher water productivity. In our study, the national government policy and the related water
resource plan may help enhance drought management and promote cooperation among water
users. The Japanese Ministry of Land, Infrastructure, Transport, and Tourism has designatedseven river basins as “river systems for water resources development” under the Water Resources
Development Promotion Law.7 These river basins have all implemented the “Water Resources
Development Basic Plan (Full Plan).” The main objective of the Full Plan is to promote thecomprehensive development and rational use of water resources in each river basin. The planis developed for each river basin by committees and working groups, where the risk of drought
is taken into account to set a target for water supplies. We use a dummy variable, Full Plan,equal to one if a river basin under water restrictions is designated as a Full Plan area, and zerootherwise. Our intention in using this variable is to investigate whether the national government
policy influences drought management in local communities. We expect higher water restriction
rates for those areas that have implemented the Full Plan.
The data on domestic water user groups were obtained from the Local Public Enterprise
Yearbook, published by the Japanese Ministry of Internal Aﬀairs and Communications.8 The
variable domestic water distribution is the average amount of domestic water distribution bywater utilities per day. A larger amount of water use may lead to a lower water restriction rate
because of higher opportunity costs. The opportunity costs of water savings may be relatively
high when the domestic water supply supports people and businesses that consume a larger
amount of water. They may include various private and public service sectors such as oﬃces,
hospitals, and schools. Thus, such larger communities may prioritize domestic water by relaxing
the water restrictions.
The variable domestic water price is measured by the price of water charged per 10 m3 for
7 The seven designated river basins are the Tone River system, Ara River system, Toyo River system, Kiso

River system, Yodo River system, Yoshino River system, and Chikugo River system. The designation was
first applied to the Tone River system that drains in the Tokyo metropolitan area and the Yodo River systemthat drains in the Osaka metropolitan area, in 1962. Today, the seven river basin regions have a population of
67 million, or 52% of Japan’s total population, and the value of the shipments of manufactured goods fromthese regions amounts to 11.1 billion yen, or 44.5% of the total value [16]. The term “river system” is used torefer to a river basin in Japan.
8 In Japan, water utilities are run by municipalities (cities, towns, and villages), prefectures, or joint public
entities consisting of municipalities and prefectures. The latter two supply water to lower-tier municipalities
as wholesalers. Municipal water utilities then supply this water or water from their water sources to households.

14

bore diameters of 13 mm. We expect higher water prices to have a negative impact on the water
restriction rate. People respond to the level of water price and reduce their daily water usage as
prices rise [25]. Under such circumstances, a strict water restriction may not be implemented
because water use is already restrained.
3.2

Model
We use ordinary least squares (OLS) model to examine the extent to which collective

decision-making aﬀects water withdrawal restrictions during a drought. The specification for
the regression model is:
Yi j = β0 + β1 Xi j + β2 Di j + β3 Ci j + β4 Zi j + δi j + εi jwhere Yi j is the maximum water restriction rate for domestic water, which is applied to dam j
during drought i.9 Xi j is a set of the collective decisions on the two other water restriction rates(agricultural water restriction rate and industrial water restriction rate), Di j is a set of damgroup characteristics (purposes of dam, dam operaion, and reservoir capacity), Ci j is a set ofclimate variability (dry days, precipitation ratio, and precipitation), and Zi j is a set of control
variables (multiple dams, Full Plan, domestic water distribution, and domestic water price). In
addition to these variables, two types of fixed eﬀects are included in our analysis: year fixedeﬀects and region fixed eﬀects, denoted by δi j . We control for either of these in the model.
For the region fixed eﬀects, we divide the country into eight areas, which is commonly used
as a geographical classification in Japan. Finally, εi j is an error term. Overall, we have 207
observations, including 56 dams for the estimation. Thus, a dam in our sample experiences
water restrictions approximately four times on average during the data period between 1983 to
2013.
4 Results
The results of our regression analysis are presented in Tables 4 and 5. In Table 4, we control
for the year fixed eﬀects in all models, while in Table 5, we control for the region fixed eﬀects.
One of the three climate variables is included in each model: the variable dry days is in models
9 Note that the water restriction rate is applied to “a group of dams j,” when the restrictions involve multiple

dams, as described in the previous section.

15

1 and 4, precipitation ratio is in models 2 and 5, and precipitation is in models 3 and 6. Models
1-3 in each table include agricultural water restriction rate and industrial water restriction rate.
Agricultural water restriction rate is significantly related to the domestic water restriction
rate. The coeﬃcients are positive and statistically significant at the 1% level in all models.
Industrial water restriction rate is also significant, but only in one model; the coeﬃcient is
positive and significant in model 3 in Table 4. The positive sign of the coeﬃcients suggests thata domestic water user group applies a higher water restriction rate as other water user groups,
agricultural and industrial water user groups, increase their water restriction rates. This finding
is in line with the hypothesis H1, namely, a water user group is more willing to cooperate forwater conservation when other water user groups also cooperate. We find that the level ofcooperation in drought management, measured by the water restriction rate, is related to othergroups’ water conservation eﬀorts.
Purposes of dam is positively correlated with the water restriction rate. The coeﬃcients are
statistically significant at the 1% level in the models with the year fixed eﬀects. In all the models
using the region fixed eﬀects, the coeﬃcients are also significant at the 1% level, except models
1 and 3 in which the coeﬃcients are significant at the 5% level. These results show that dams
with more purposes tend to implement more stringent water restrictions. Therefore, the finding
supports our hypothesis H2: the more purposes for water use lead to more cooperation. The
number of purposes of a dam indicates the number of stakeholders involved in water resource
management. In our study, we find that a larger group may lead to cooperation in terms ofwater conservation. The variable dam operation, measured by the operation period of a damat the time each drought occurred, is not significantly related to the water restriction rate in
our estimation. Thus, we do not find evidence of the hypothesis H3: a longer experienceof resource management induces cooperation for water conservation. We find a positive andsignificant correlation between reservoir capacity and the water restriction rate. The coeﬃcientof 0.707 in model 1 in Table 4 suggests that an increase in reservoir capacity by 100 million
m3 raises the domestic water restriction rate by approximately 0.71%. This result is contraryto H4 and suggests a positive impact of reservoir capacity on the water restriction rate. One
possible explanation for this is that reservoir capacity as a characteristic of CPRs may promote
cooperative action toward water saving. Schlager et al. [24] describe the storage capacityof a resource system as one of the physical aspects of CPRs, which induces cooperation

16

Table 4. Regression results (OLS, year fixed eﬀects)
Dependent variable

Domestic water restriction rate
12

3

0.438∗∗∗

0.421∗∗∗

0.413∗∗∗(0.088)(0.087)(0.075)

Industrial water restriction rate

0.063
(0.064)0.079(0.064)

0.096∗(0.054)

Purposes of dam

3.186∗∗∗(0.715)2.929∗∗∗(0.695)

Dam operation-0.026(0.096)

Reservoir capacity

0.707∗(0.378)Dry days

0.092∗∗(0.039)Agricultural water restriction rate

Precipitation ratio

4

5

6

2.325∗∗∗(0.710)3.760∗∗∗(1.111)

3.669∗∗∗(1.058)3.043∗∗∗(1.115)-0.031(0.096)0.049(0.111)

0.093(0.123)0.099(0.120)0.171(0.137)0.586(0.367)0.328(0.328)0.586(0.579)0.596(0.560)0.263(0.502)0.061(0.059)-0.113∗(0.065)-0.020(0.052)0.008∗∗∗(0.002)

Precipitation

0.008∗∗∗(0.003)

Multiple dams

-2.931(1.845)-2.645(1.861)0.929(2.045)-10.407∗∗∗(2.185)-9.960∗∗∗(2.145)-6.596∗∗∗(2.399)Full Plan

9.647∗∗∗(1.938)9.767∗∗∗(1.953)

8.697∗∗∗(1.768)6.951∗∗∗(2.325)7.428∗∗∗(2.383)6.231∗∗∗(2.207)

Domestic water distribution-0.000(0.000)-0.000(0.000)0.001(0.000)-0.000(0.001)-0.000(0.001)0.000(0.001)

Domestic water price0.001(0.005)-0.001(0.005)-0.001(0.005)0.006(0.006)0.005(0.006)0.005(0.005)Constant-50.578∗∗∗(13.828)-22.694∗∗∗(7.404)-34.649∗∗∗(7.708)-38.427∗(20.333)-12.582(9.256)-30.102∗∗∗(9.049)Observations
Adjusted R2

207
0.486

207
0.478

207
0.533

207
0.196

207
0.204

207
0.247

Robust standard errors in parentheses∗ p < 0.1, ∗∗ p < 0.05, ∗∗∗ p < 0.01

among resource users when managing their resources.10 The presence of storage capacity helps
mitigate the problems that arise in CPR settings. For example, storage capacity restrains theoverconsumption of resources when users attempt to withdraw or harvest the resources before
others do. This means that resource users’ incentives for overuse become lower because they canreserve their resources. Taking the example of an irrigation system, Schlager et al. [24] pointout that larger storage capacities enhance users’ ability to control water. They further argue thatusers who have more ability to control water through storage capacity are more cooperative inmanaging water resources.
The estimated results of the meteorological variables suggest that climate variability can
10 According to Schlager et al.

[24], storage is defined by the availablity of storage capacity (e.g., reservoirs,
irrigation canals, and groundwater basins) that is able to keep resource units (e.g., water in stream, fish, andwildlife) in stock. The other physical aspect, stationarity or mobility, is defined by whether unharvested
resource units (e.g. water, shellfish, and timber) remain spatially for a longer time, or migrate inside and/or
outside the resource system.

17

Table 5. Regression results (OLS, region fixed eﬀects)
Dependent variable

Domestic water restriction rate12

30.524∗∗∗

0.517∗∗∗

0.511∗∗∗(0.085)(0.086)(0.086)

Industrial water restriction rate

-0.012(0.074)-0.017(0.072)0.029(0.072)

Purposes of dam

2.161∗∗(0.831)2.258∗∗∗(0.801)

Dam operation

0.084(0.100)Reservoir capacity

1.090∗∗∗(0.348)Dry days-0.014(0.048)Agricultural water restriction rate

Precipitation ratio

4

5

6

1.804∗∗(0.738)3.608∗∗∗(1.057)3.282∗∗∗(0.991)3.000∗∗∗(1.016)0.093(0.104)0.085(0.101)-0.012(0.101)

0.067(0.099)0.004(0.103)

1.142∗∗∗(0.323)0.850∗∗∗(0.278)1.313∗(0.672)

1.251∗∗(0.574)1.038∗(0.606)0.100(0.069)-0.160∗∗∗(0.044)-0.023(0.032)0.004∗∗∗(0.001)

Precipitation

0.001(0.002)Multiple dams

-2.747(2.025)-2.854(2.064)-0.953(2.252)-10.894∗∗∗(2.284)-11.009∗∗∗(2.218)-10.557∗∗∗(2.579)Full Plan

8.039∗∗∗(2.227)8.120∗∗∗(2.249)8.236∗∗∗(2.197)7.033∗∗(2.907)7.396∗∗∗(2.825)6.602∗∗(2.838)Domestic water distribution-0.002∗∗(0.001)-0.002∗∗(0.001)-0.001∗∗(0.001)-0.002∗(0.001)-0.002∗(0.001)-0.002∗(0.001)

Domestic water price-0.004(0.004)-0.003(0.004)-0.006(0.004)0.001(0.005)0.001(0.005)-0.002(0.005)Constant-12.494(14.580)-14.225∗(7.340)-17.767∗∗(6.914)-40.650∗∗(19.880)-5.818(10.640)-17.621∗(10.076)

Observations
Adjusted R2

207
0.558

207
0.558

207
0.578

207
0.184

207
0.222

207
0.177

Robust standard errors in parentheses∗ p < 0.1, ∗∗ p < 0.05, ∗∗∗ p < 0.01

lead to more stringent water restrictions. The coeﬃcients of dry days and precipitation ratio arein line with H5, showing a significant correlation between each weather variable and the water
restriction rate. The coeﬃcient of dry days in model 1 in Table 4 indicates that one fewer rainy
day raises the water restriction rate by approximately 0.09%. This finding implies that water
restrictions can be more serious when there are more dry days. As mentioned in Section 2.3,
the number of dry days has increased in Japan over the past 100 years and this trend is expected
to continue. The Japanese Ministry of the Environment and the Japan Meteorological Agency
have jointly reported climate change projections for assessing the impact of climate change on
the country in order to develop the National Adaptation Plan [14]. According to their report, thenumber of dry days in Japan is projected to increase by 1.1 days (RCP2.6) to 10.7 days (RCP8.5)
based on representative concentration pathways (RCPs).11 By using these projections and our
11 RCPs are the climate scenarios adopted in the IPCC Fifth Assessment Report. Four RCPs are commonly usedand defined by the total radiative forcing by 2100. RCP2.6 represents the least radiative forcing level pathway
and RCP8.5 represents the highest level pathway.

18

estimated result, the water restriction rate is expected to rise by 0.10% to 0.98% depending on
the scenarios. Hence, changes in precipitation patterns may cause more extreme droughts tooccur, thereby making the drought response more diﬃcult in terms of water restrictions. The
variable precipitation ratio, measured by the ratio of annual precipitation to the mean annual
precipitation between 1981 and 2010, is negatively correlated with the water restriction rate. The
finding suggests that the water restriction rate tends to increase in a year with lower precipitationcompared with the average year. The coeﬃcients are statistically significant in model 5 in both
Tables 4 and 5. The estimation results show that the restriction rate increases by approximately
0.11% to 0.16% when the precipitation ratio is 1% lower. Thus, drought management may be
aﬀected by this climate variability in the future. However, whether Japan will receive higher orlower precipitation in the coming decades is uncertain. The precipitation projections have highfluctuations depending on the scenarios and regions. Lastly, the coeﬃcients of precipitation
are statistically positive and significant, which is inconsistent with our hypothesis. This may be
due to the unsuitability of using annual precipitation to capture the impact on water restrictions
that are usually implemented for only a short period of time. Although the duration of water
restrictions for each drought varies, water restrictions in some cases last only a couple of days
or weeks in our sample. Therefore, the annual amount of precipitation may not reflect such
short-term droughts.
Besides the hypotheses above, we also include other characteristics associated with theresource system and test whether these variables aﬀect collective decisions on water restrictions.
The variable multiple dams is insignificant in models 1-3 in Tables 4 and 5. On the contrary,
we find that the coeﬃcients are negative and statistically significant at the 1% level in models
4-6. The water restriction rate is likely to be lower when river basin communities manage
several dams together for the purpose of drought response and the implementation of joint
water restrictions on these dams. Nevertheless, this is only the case when we do not control for
agricultural and industrial water restriction rates. We do not find that the joint implementationof water restrictions on multiple dams is related to the domestic water restriction rate in models
1-3. The policy-related variable, Full Plan, is positive and significantly correlated with the water
restriction rate. The result suggests that a higher water restriction rate tends to be implemented
in those river basins where the national government policy for water resources is applied. Thus,
we find that the government policy for water resources is positively related to collective decisionmaking in community drought management. The coeﬃcients of domestic water distribution

19

are insignificant in the models using the year fixed eﬀects. However, they are negative andstatistically significant in the models using the region fixed eﬀects. The negative sign of thecoeﬃcients suggests that a lower water restriction rate tends to be applied to domestic wateruser groups with higher water distribution. With regard to domestic water price, the coeﬃcientsare not significantly related to the water restriction rate in any of the models. We expect water
prices to have a negative eﬀect on the water restriction rate because water use may already be
restrained in municipalities with higher water prices. However, we do not find a correlation
between water prices and the water restriction rate.
5

Conclusions
This study examines collective decision-making in water resource management during

droughts. The data used in the analysis include 207 cases of regional droughts that occurredin Japan from 1983 to 2013. In response to a drought, water users in river basin communities
participate in drought management and take action to mitigate water shortages. By focusing on
this community-based drought response, we examine which characteristics of the resource management aﬀect collective decisions and contribute to cooperative actions for water conservation.
In addition, our study investigates the impact of climate variability on drought management byanalyzing weather patterns that are likely to aﬀect drought conditions.
The regression results show cooperative collective action for water conservation amongwater user groups that jointly implement a drought response. We find that the level of water
restrictions on domestic water user groups, measured by the rate of reductions in water withdrawals, is correlated with the level of water restrictions on other water user groups. Water usergroups tend to impose higher water restriction rates when other water user groups also impose
higher water restriction rates. This result suggests that the willingness to cooperate and savewater depends on other water users’ cooperativeness. This finding is in line with the resultsof laboratory experiments showing that people are conditionally cooperative, namely they arewilling to cooperate when others cooperate as well [10]. Thus, the result of our empirical
study could be concluded by saying that we find some evidence of conditional cooperation in
real-world settings. Our study also shows other factors related to collective decision-making
in drought management. In particular, we find that group size, measured by the number of
purposes of a dam, is positively correlated with the level of water restrictions. Another findingis that greater reservoir capacity may lead to more cooperation in drought management. This20

result shows that the level of water restrictions is higher when the storage capacities of reservoirs,
which are the source of water shared in a community, are larger.
Furthermore, we examine how climate variability aﬀects drought management. Our study
finds that drought-related climate patterns are related to water restrictions. The results show thatdry days, measured by the number of days without precipitation, lead to the implementation ofa higher water restriction rate. We also find that water restrictions tend to be more serious whenannual precipitation is lower compared with precipitation in the average year. These findings
suggest that more severe water restrictions may be required as climate change becomes more
serious through changes in precipitation patterns. Given climate change as a cause of more
intense and frequent droughts, our study shows the consequences that climate change may havefor water resource management.
While we should bear in mind that the factors that induce successful or unsuccessful
CPR management depend on the context, our findings may have important implications forpolicymakers, local governments, and managers. Because the community-based managementof water resources involves various groups of stakeholders, it is crucial to understand the
behavioral mechanisms of these groups when they interact. Our findings suggest that reciprocal
cooperation could lead to greater water conservation eﬀort during a drought. Cooperation is a
key element in community resource management. From this perspective, drought coordination
councils in Japan may play an important role in providing opportunities for interaction topromote cooperation among water users. Moreover, a better understanding of CPR management
mechanisms may be useful in terms of climate change adaptation. We can expect more serious
droughts to occur in the coming decades because of climate change. Research on water resource
management by communities facing droughts could thus contribute to the implementation ofeﬀective climate change adaptation strategies.
Nevertheless, a limitation of our study is that unobserved, yet important variables may aﬀect
collective action in the context of water resource management. Indeed, analyzing the interactions of resource users and the management mechanisms of resource systems is challenging
because the management of CPRs includes multiple stakeholders who form extremely complex
interrelations. For example, the farmers in a community who cooperate with each other whenconfronting farmers in other communities may compete with each other for the allocation ofwater in their own community [27]. Future research should take into account such interactions
among multiple levels of complex systems to examine the reality of CPR management.

21

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