Regulators

Once again, regulators are responding
to shortages—in this case of water—
with controls and regulations rather than
allowing the market to work. Cities are
restricting water usage; some have even
gone so far as to prohibit restaurants
from serving water except if the customer
asks for a glass. But although
cities initially saw declines in water use,
some are starting to report increases in
consumption. This has prompted some
police departments to collect lists of residents
suspected of wasting water.
There’s a better answer than sending
out the cops. Market forces could
ensure plentiful water availability even in
drought years. Contrary to popular belief,
the supply of water is no more fixed
than the supply of oil. Like all resources,
water supplies change in response to
economic growth and to the price. In developing
countries, despite population
growth, the percentage of people with
access to safe drinking water has increased
to 74 percent in 1994 from 44
percent in 1980. Rising incomes have
given those countries the wherewithal to
supply potable water