Cooperation in Transboundary Water Sharing with Issue Linkage: Game-Theoretical Case Study in the Volta Basin

Abstract

This paper investigates issue linkage of water and energy in transboundary water sharing agreements and evaluates how such issue linkages can enhance the scope of cooperation between upstream and downstream countries. In a case study on transboundary water sharing between Burkina Faso and Ghana, the main upstream and downstream riparians in the Volta Basin, the paper evaluates both the scope and sustainability of such cooperation based on issue linkage. In the framework of a static Stackelberg game with numerical analysis, it is found that the interdependency of countries can lead to efficient and effective solutions regarding water sharing. In the cooperation phase, Ghana has the opportunity to increase its water consumption for agriculture, which is currently restricted, while Burkina Faso benefits from discounted hydropower as a compensation for restricting its water consumption. In such a case, the cooperation is mutually beneficial and stable. However, such interdependency may not be sustainable in the very long term, i.e., when population increase induces Burkina Faso to increase its water consumption and destabilizes the cooperation based on the water and energy issue linkage. Overall, the results show that issue linkages within the water sector might present additional strategies to generate benefits from cooperation on transboundary rivers by taking into account more than water use alone. The collective benefits of hydropower can lead to an overall improvement in welfare.