Ahmed Salim Al-Marshudi - Department of Agricultural Economics and Rural Studies College of Agriculture Sultan Qaboos University

The scarcity of water in Oman has let to the development of a system of water allocation very different from that which exists in regions graced with more rainfall that is abundant. Omanis have perfected the art of exploiting available water resources to the best advantage over the centuries. An example of this is the falaj system (plurar aflaj), which was introduced into Oman about a thousand years ago. Water rights are treated similarly to rights to real property, which is they can be inherited, sold, rent, and encumbered in the same manner, all independently of the land on which the water originates, or on which it is used The important of water rights arrangement and location can be attributed to the following factors. First, the economic development has been strongly influenced by the ability of a society to control its water resources and to use them effectively and sustainably. Second, water allocations should support long-term goals and investment and also incorporate a renewal mechanism for future generations. Third, water allocation mechanism is highly linked to the society’s objectives, that is, if the society wishes to govern land use to meet say poverty alleviation or increase productivity of certain crops, then this becomes a water allocation objective. In this paper review of such system in terms of water rights institutional arrangement have been undertaken. Several important finding have been revealed. For instance, historical link exist between certain instrumental aspects of aflaj water rights and well-social coding. In addition, economic instrument like water market have been established for centuries.