The San Francisco Bay-Delta: A failure of decision-making capacity

The paper reviews the history of Bay-Delta decision-making in California in order to
highlight the continuity between what happened with CALFED and what happened in
the preceding decades since water project deliveries began in 1949. Throughout this period,
there has been intense conflict about whether and how to transfer water from the Bay-Delta
to users elsewhere—a conflict marked by a fundamental opposition of interests among
stakeholders. We document how the State of California has failed to organize itself
effectively to resolve this conflict and make a decision on how to manage the Delta. The
strategy consistently adopted by the State was to encourage the main parties – agricultural
and urban water diverters, and fisheries and other instream-protection interests – to work
out a solution among themselves, rather than imposing one externally. However, economic
theory suggests that a bargaining solution is unlikely to exist because of the extreme
opposition of interest among the parties. The Bay-Delta history amply confirms this
theoretical prediction. Thus, the State’s strategy of relying on voluntary agreement to
resolve the issue is fundamentally misconceived and is, at some level, an abdication of
its responsibility.