If only life were that simple; Optimism and pessimism in economics

The Rio declaration's assertion that water is an economic good simply raises the question of what this I means in practice. Two extremes of economic approaches to this question are compared and contrasted in terms of the ways in which they frame different management issues about water. The optimistic or Panglossian approach sees the problem as involving no more than applying text book economic theory; the pessimistic or Pragmatic approach see the role of economics as being to clarify the nature of the decision that must be made. These differences tell us something about economics but more importantly about the management of water. (C) 2000 Published by Elsevier Science Ltd. All rights reserved.