The Costs of Compliance with Interstate Agreements: Lessons from Water Compacts in the Western United States

Interstate compacts are one of the primary institutional mechanisms that states use for addressing regional issues such as sharing and management of transboundary rivers. However, state compliance with compacts can be challenging and costly. This article asks: how do conflict resolution venues and the design of state administrative systems affect the distribution of compliance costs? Through a study of western interstate water compacts we find that compliance costs are more equally shared among states in voluntary conflict resolution venues compared to compulsory venues. In addition, centralized administrative systems result in state governments bearing the costs of compliance actions, whereas polycentric administrative systems distribute costs between the state and water users. Finally, we explore the applicability of our findings to other interstate settings.