Opinion: Wisdom from a Nobel winner to defuse the Colorado River crisis

In March 2025, the United States took an unprecedented step by denying Mexico’s request for a special water distribution channel from the Colorado River to Tijuana. This was followed in April by President Trump threatening tariffs and sanctions, citing Mexico’s alleged non-compliance with the 1944 Water Treaty.

These escalating tensions mark a critical point in the cross-border water crisis that has been brewing for decades. With Colorado River reservoirs reduced to one third of their capacity and communities on both sides of the border facing an uncertain future, it seems inevitable to ask: is there a better way to manage this vital resource?

The answer might be found in the pioneering work of Elinor Ostrom, the first woman to win the Nobel Prize in Economics in 2009. Her masterpiece, Governing the Commons, offers an innovative framework that challenges our traditional understanding of how to manage shared resources like water.

Beyond the state-market dilemma

For decades, conventional thinking has maintained that to avoid the “tragedy of the commons” — a concept famously articulated by Garrett Hardin in his influential 1968 article published in Science — only two solutions exist: privatization or centralized government control. According to Hardin’s thesis, when individuals have unrestricted access to a shared resource, they will inevitably act in their self-interest and overexploit it until depletion.

The 1944 Water Treaty between Mexico and the United States, which allocates 1.85 billion cubic meters annually from the Colorado River to Mexico and establishes reciprocal obligations regarding the Rio Grande, represents this traditional approach of governmental control designed to prevent such a tragedy.

However, Ostrom discovered something revealing: there is a third way. Through meticulous studies in communities worldwide, from irrigation systems in Nepal to fisheries in Maine, she demonstrated that resource users can create effective local institutions that enable sustainable management without the need for external impositions. Her 1990 book Governing the Commons directly challenged Hardin’s pessimistic view by providing empirical evidence that communities can and do develop sophisticated arrangements for managing common-pool resources sustainably.

Lessons from California

Interestingly, one of Ostrom’s earliest studies — her 1965 doctoral thesis — examined precisely a case of water management in California. She documented how communities around Los Angeles, faced with aquifer overexploitation and saltwater intrusion, developed cooperative self-governance mechanisms that effectively resolved their water crisis.

These “public entrepreneurs,” as Ostrom called them, did not wait for solutions imposed from above. They created associations, shared information, funded joint scientific studies, negotiated agreements, and designed monitoring systems that allowed for sustainable resource management.

Ostrom’s principles applied to the Colorado River

How would we apply Ostrom’s principles to the Colorado Basin? Let us consider five of her eight famous institutional design principles:

1. Clearly defined boundaries: Although the 1944 treaty defines allocations, it doesn’t clearly establish how to adapt these limits in the face of climate change. An Ostromian approach would require updating these boundaries considering the new hydrological reality.

2. Congruence between rules and local conditions: Current rules are based on measurements taken during an unusually wet period in the 1940s. We need rules adapted to current and future climate conditions.

3. Collective-choice arrangements: Affected users, from farmers to urban communities, must directly participate in modifying the rules. Currently, decisions are primarily made between federal governments, excluding many stakeholders.

4. Effective monitoring: A transparent monitoring system based on mutual trust that involves all stakeholders, not just government agencies, is required.

5. Graduated sanctions: Instead of drastic measures like completely cutting off water supply, a system of progressive sanctions would incentivize compliance.

‘Polycentric’ governance

The Colorado River challenge requires what Ostrom termed “polycentric governance”: a system with multiple decision-making centers operating with some independence but under a coordinated framework. This means involving local governments, user groups, non-governmental organizations, academic institutions, and indigenous communities — in addition to federal governments — in a nested management system.

This approach recognizes that the Colorado Basin is too complex to be effectively managed by a rigid binational treaty or by unilateral decisions. The diversity of interests and local conditions demands flexibility and adaptability.

From confrontation to cooperation

The current crisis is not only a result of drought or climate change but also of an inadequate governance approach. Ostrom’s work reminds us that resource users have the capacity to cooperate and develop sustainable solutions when the right institutional conditions are created.

Instead of resorting to threats of tariffs or supply suspensions, Mexico and the United States should facilitate processes that allow local communities and water users to actively participate in river governance. This does not mean abandoning federal agreements but complementing them with multi-level institutions that can respond more effectively to changing conditions.

Ostrom’s legacy offers us not only a critique of the current system but also a constructive path forward. The Colorado River crisis is not inevitable; with the right institutions, it is possible to transform a zero-sum game into an opportunity for cooperative innovation.

Perhaps it is time for officials on both sides of the border to dust off their copies of Governing the Commons and discover that the solutions they have been looking for have been waiting to be applied for decades.

Dr. Ismael Plascencia López PhD is regional development wpecialist and professor-researcher at CETYS University in Tijuana.