Published by EH.NET (December 2006)

Karen M. O’Neill, Rivers by Design: State Power and the Origins of U.S. Flood Control. Durham, NC: Duke University Press, 2006. xxi + 278 pp. $23 (paperback), ISBN: 0-8223-3773-8.

Reviewed for EH.NET by Brooks A. Kaiser, Department of Economics, Gettysburg College.

U.S. flood control grew in stages that correspond generally to what one might expect in a nation-state that was experimenting with democratic, decentralized approaches to providing public goods and resolving the burdens of externalities. In regions as seemingly disparate as the Mississippi and Sacramento valleys, political and economic forces worked in similar ways to drive a reluctant federal government into the business of engineering rivers for a variety of uses. In this book, O’Neill illustrates the parallels between river valley development in the West (Sacramento Valley) and the South (Mississippi Valley), and the political machinations that evolved into a wide range of river-management programs, in particular flood control. She provides well-researched descriptions of who captured political control of local and state flood control as federal intervention grew in response to both disputes and disasters, showing how the physical responses to floods and the threat of flooding, in particular levee-building, moved from the domain of the individual property owner to first local, then state, and finally federal (Army Corps of Engineers) hands.

The synonymity of pork barrel politics and public water works makes this comparative political approach valid and informative. The book does not, however, make any use of economic theory to aid the explanation of how these two phenomena came to be so intertwined. This leads to “blame” placed on political failings and vaguely defined “economic development” for the current state of over-engineered rivers that continue to flood and cause dramatic and extensive damages, rather than an illumination of the underlying economic framework upon which these failings were predicated. In so doing, many opportunities for interesting insights and broader conclusions are lost. The book’s final chapter, for example, which argues that the future of rivers will require a more holistic management system encompassing environmental quality and addressing the changing demands Americans are placing on their river systems, leaves the reader wondering whether such solutions can ever be achieved, and if so, how.

Grounding the story in some context of Coasean economics would increase the explanatory power of the book’s argument significantly. The case studies of the two river valleys are thoroughly documented and described (the bibliography and notes cover the legal and political evolution of rights well) but the core economic challenges faced in the presence of imperfect property rights is never articulated, and so the evolving political grabs for those property rights, which constitutes much of the meat of the book, is stripped of its greater potential use in evaluating the outcomes of those grabs.

In the South, land along the Mississippi was of much greater economic value than other land in great part because of the reduced transportation costs. Protection of this value, however, depended on both the strategic actions of others with property along the waterway and the physical reliability of the waterway and its path. Levees and other engineering techniques for directing the unruly river system served to reduce the uncertainty in an individual parcel’s land value, while simultaneously increasing the overall spread in property values by more clearly delineating the “haves” from the “have-nots.” Once entrenched, the wealth generated from the higher land rents seem to have been directed at political efforts to maintain them. This was predominately a local and state phenomenon until western expansion in the late 1840s, and then Reconstruction, aggravated regional tensions for federal spending, but the economic underpinnings for the evolution to the federal level stem from the difficulties in establishing property rights to a river whose course and flooding patterns generated so much uncertainty.

The Sacramento Valley’s case broadly pitted agriculture against mining in its origins, and again economic theory, this time of externalities (not formalized at the time), would have predicted that without clear property rights to the water and its quality, the water could not be efficiently used across multiple (and to varying degrees competing) uses. Indeed, the evolution of western water law that stemmed from these early conflicts, and its economic implications, have been studied by economists (e.g. Michael Hanemann) and lay writers (e.g. Marc Reisner) to great effect, and I recommend these authors’ works for more insightful economic history on the same topic.

Technological change, state and local regulation to resolve externalities, and changes in demand and supply for both mining and agricultural goods eventually reduced the conflicts between mining and agriculture and turned both groups toward flood control concerns that again reduced uncertainty and increased the industrial potential of the region.

With incentives in place for the West and the South to simultaneously demand federal action, there becomes more room for the political punch-line, which is really about the separation of powers in controlling waterways for different purposes. This piece-meal outcome, where the Army Corps of Engineers oversees flood control while the Bureau of Reclamation oversees irrigation and the Fish and Wildlife Service oversees species habitat, for example, is unlikely to be economically efficient and reduces the benefits of federal intervention as each bureaucracy engages in its own, often competing, agendas.

O’Neill demonstrates that the current breadth of this separation was almost avoided in proposed changes under the New Deal, and also that those proposals were doomed by longstanding political lobbyist interests originating in much earlier policy fights. The details are copious, with almost every paragraph summarizing an entire research agenda.

To place these details in a more supportive and enticing format for economic historians, what should be added is that while the outcomes were political, those lobbyist interests formed chiefly due to economic failures that stemmed from attempts to capture returns from missing or imperfect property rights. The successful seizing of these property rights by certain groups determined the balance of wealth between competing interests, and today we seek to redistribute that wealth so that it includes new interests. The ability to do so will be limited by the resulting inability to plan across the divided agency mandates, the origins of which pre-date both useful economic and environmental theory and application that could increase the overall wealth available for redistribution.

Brooks A. Kaiser is an Associate Professor of Economics at Gettysburg College and Affiliate Graduate Faculty member of the department of economics at the University of Hawaii. She conducts research on past and present problems pertaining to natural resource use. She is currently working on several projects on Hawaiian ecosystems and resources, some of which are outlined at, as well as public goods provision in ancient Greece.