15 Chi. J. Int'l L. 27 (2014-2015)
Egypt, Ethiopia, and the Nile: The Economics of International Water Law

handle is hein.journals/cjil15 and id is 31 raw text is: Egypt, Ethiopia, and the Nile: The Economics of
International Water Law
Daniel Abebe*
Abstract
As part of a Symposium on the book The Economic Foundations of
International Law, this Article briefly compares and contrasts two distinct analytical
approaches to international law-doctrinal versus economic-in the context of Egypt's and
Ethiopia's dispute over the right to exploit the Nile River's water resources. The Article argues
that the traditional doctrinal approach, one based solely on an examination of international
water law, treaties, and customary international law is unlikely to result in a legal conclusion
that either state is likely to respect because such an approach fails to consider the incentives,
material capabilities, and national interests of Egypt and Ethiopia. However, the Article
argues that an economics approach focusing on state preferences and incentives for compliance
with international law in a world without a central enforcement mechanism will better
illuminate the obstacles that Egypt and Ethiopia face and the likelihood of legal resolution of
the conflict. After examining the interests and political constraints on both states, the Article
concludes with a simple application of transaction costs economics, focusing on propery rights
and liability rules, to understand how Egypt and Ethiopia might respond to different legal
arrangements designed to resolve the conflict.
*   Professor of Law and Walter Mander Teaching Scholar, University of Chicago Law School. I am
grateful to the participants at the Conference on International Law and Economics at the
University of Chicago Law School and the Loyola University International Law Colloquium at
Loyola University Chicago School of Law for helpful comments and suggestions. I also owe many
thanks to Val Washington and Kate Long for their fine research assistance, and to the Chicago
Journal of International Law for their excellent editing. Finally, I would like to acknowledge the
support of the George J. Phocas Fund and the Elmer M. Heifetz Fund.

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