DAMS AND DEVELOPMENT: NOTES ON THE SOCIAL AND ECONOMIC IMPACT OF
DAM IN TECHNOLOGICALLY ADVANCED CONTEXTS
1.
FOREWORD
Since technical development brings about huge and far-reaching transformations, it carries along
the need of selecting, implementing and controlling its short, medium and long term consequences.
The very fact that “technique” and “technology” share a significant part of their terminologies
testifies that the development of production is essentially knowledge, before being a way of doing
things.
The issue of the relationship between technical objects and socio-economic development is first of
all an issue of control, not only of the techniques themselves, but of their ability to satisfy a definite
set of ends and scopes. How then can we measure the suitability of technical means in satisfying
social ends? If dams are seen as a way to promote human development and welfare, it is possible to
determine how every single installation takes part in that development? And is that contribution
comparable with its potential alternatives? And lastly, which types of measures must be put into
effect in order to isolate the impact of a single dam, when any technical object generates continuous
feedbacks with the context in which it operates, up to the point that implementing the means
modifies the perception of the ends?
These and other central issues surrounding the scope and role of large dams were dealt with in the
“Dams and Development. A new Framework for decision Making” Report by the World
Commission on Dams (hereafter WCD), officially issued on november the 16th, 2000.
A short overview of the WCD history, nature and scope may be useful to pinpoint the terms of the
issues at stake. Under the patronage of the World Bank, a workshop was held in april 1997 Gland,
Switzerland, with the aim of facing the major controversies concerning the overall socioeconomic
impact of large dams. The workshop gathered 39 participants, representing all the interests and
competencies involved: government members, private sector professionals, international financing
institutions, non-governmental associations, environmentalists, representatives of displaced people,
etc.
The workshop advanced the proposal of setting up a World Commission on Dams, with the aim of:

analyzing the effectiveness of dams in promoting development;

pointing out the available alternatives to dams for electricity production and water resources
supply;
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
developing internationally acceptable criteria, guidelines and best practices for large dams
planning, design, approval, construction, management, monitoring and decommissioning.
The WCD began its activity in may 1998 under the chairmanship of Prof. Kalder Asmar, the then
Water Resource Minister of South Africa; members were chosen with the explicit aim of reflecting
the different national, professional, socioeconomic sensibilities. The WCD concluded its work after
two years, summarizing its activities and findings in the above mentioned Report.
While recognizing the importance of large dams in promoting human development, the WCD
Report seems oriented to a substantially negative opinion about the overall performance of this kind
of installations, and specifically in terms of:

poor economic and financial results, when compared to those foreseen in feasibility businessplans;

quality and quantity of negative environmental impacts;

unfair distribution of costs and benefits among the different subjects, i.e. among the final users
of the dam’s services and the population living in the areas directly affected by the presence of
the dam and its dependencies.
This last point is of a paramount importance. The Report states that a total of 40 to 80 million
people have been displaced from their home lands as a direct effect of dams construction. A greater
number has seen the sources of their income reduced or eliminated altogether, following the
alterations brought about by dams in their habitat and in its capacity to support traditional and nontraditional economic activities. In most of the cases this has occurred without any –or a propercompensation to affected people and communities; resettlement programmes often turned out to be
lacking and short-sighted, aiming mostly at finding a new physical settlement instead of fostering
social and economical development. The issue of equity in the distribution of costs and benefits is
considered by the WCD the most problematic of all, since unsatisfactory economic results and
environmental disruptions can be faced with a different approach to cost-benefit analysis, e.g. by
making more realistic assumptions about profitability and by incorporating environmental
mitigation measures within dams design and construction; on the other hand, in the case of
socioeconomic fallouts, the WCD report seems to assess that in some extreme circumstances –e.g.
when the sharing of costs and benefits is too unfair- a compensation scheme might not even exist at
all; in other words, that no cost-benefit analysis adjustment might be found to compensate the
“losers” for the costs they are bearing. Such a statement is of great significance for future dam
financing, design, construction and management scenarios, at a world level, all the more so if it
should prove to be relevant to any typology of dam and not for a definite set of installation. In fact,
one is left to ponder whether the framework adopted by the WCD might be applied to any
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circumstance or, in other words, if diagnoses and therapies set forth in the report were of a general
nature and relevant to all 45,000 installations considered as ‘large dams’ at world level. Two issues
seem to be of great importance to these points:

problems in the definition of ‘large dams’;

the relationship between the technical object and the context in which it is placed.
To these two issues we now turn our attention.
2.
WHY SIZE MATTERS: PROBLEMS IN THE DEFINITION OF “LARGE DAMS”
The WCD Report states that a total of 40-80 million people have been displaced following the
construction of large dams; however, this number might conceal very different situations. By
extracting a purely arithmetic average of the people displaced by any single dam, we obtain a figure
of 1,777 persons for any of the 45,000 large dams; this seems to be a reasonably low number, fit to
allow a relatively smooth and cheap management and mitigation of the disruption induced by the
dam, all the more so if the territory hosting the displaced people is reasonably homogeneous with
that from where the people were moved from. This holds true only under the very strong
assumption of making a raw average of the people displaced over the whole universe of large dams:
in the real world, it is obvious that most of the disruption brought about by large dams at social
level is to be attributed to a fairly small fraction of dams with significantly above-average
dimensions.
There thus seems to be an ambiguity in the very term “large dam”. By the ICOLD definition, a large
dam is a dam either more than 15 metres high or with a reservoir of more than a million cubic
metres. What is lacking is thus the possibility of subdividing large dams in sub-sets, as well as of
giving substance to any definition of an “average” large dam. Conversely, it is quite probable that,
crossing a specific threshold of some quantitative parameters (height, reservoir volume, basin
dimension, etc.) may bring forward qualitatively different anthropic and physical impacts. If this
holds true, it would be necessary to qualify this type of dams in order to evaluate their social and
economic impacts.
Lastly, it is quite possible that a “critical threshold” may exist, after which any compensation
measure in order to mitigate the dam’s impact were too expensive or inadequate. In short, there is
no continuous line linking a small resettlement within a fairly homogeneous territory and a big one
in a totally different physical and cultural context. To sum all the abovementioned considerations,
there is a inferior bound separating small and large dams, but there seems to be lacking the
definition of a critical threshold
within the class of large dams after which the quantitative
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characteristics of a dam induce qualitative effects which are not comparable with those induced by a
dam failing to reach that threshold: quantity becomes quality and generates completely different
social and economic dynamics.
3.
THE TECHNICAL OBJECT AND THE CONTEXT IN WHICH IT IS COLLOCATED
The issue of the relationship between any technical object and its surrounding economic, social and
cultural environment is again linked to a problem of critical thresholds allowing to classify the level
of infrastructuring of the hosting context. This distinction allows to evaluate the different impacts of
any single object and, broadly speaking, to keep into account that no technical object “exists”
independently from a complex texture of technical and economical interrelations whose
characteristics determine the positive and negative impacts of that object in the hosting context.
When assessing the impact of large dams on economic and social development it is thus extremely
important to distinguish between advanced contexts, in which economic development has already
carried on a significant degree of infrastructuring –apt at supporting or even requiring a further
expansion of that territory’s technical dimension-, and underdeveloped contexts where the technical
object is itself meant to promote the development: by definition the latter are less apt to sustain the
impact of technological development.
It is now possible to cross the two critical thresholds (“small”/”big” large dams;
developed/underdeveloped contexts) to obtain a matrix of four qualitatively and quantitatively
different cases:
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It is reasonable to assess that the large majority of dams in Europe, the US and Japan would fall
within the category “’small’ large dam in developed contexts”.
Now, what is the peculiarity of the experience of the planning, construction and management of
dams in technologically advanced contexts, and what lessons can be drawn in order to support
improvements in the way such kind of technical objects may be put in place in different –less
developed-contexts? The central point is of course that of forecasting and then monitoring the costs
and benefits of the project, and most of all putting in action contractual mechanisms able to bring
about the highest possible equity in cost and benefit distribution. In evaluating the impacts of
technical realizations, the variables at stake cannot be exclusively technical, not even in the widest
possible meaning of the term, but have to be necessarily political. In other words, the need of
procedures to control the technical object’s impacts, carries along a process of defining what may or
may not be considered as a resource, before addressing the issue of how to use (or abstain from
using) a given resource. This process belongs entirely to the political sphere, where “political”
refers to the structure which detects, weighs and mediates the different interests and aims of society.
Thus, one cannot describe a technological context without keeping into account its institutional,
political and administrative structure. Stretching this remark to its limit, one might even say that no
technological context really exists without a political structure surrounding it: a factory without a
set of laws on manufacture is not a technical context, is a technical object.
Now, the peculiarity of technologically advanced contexts is that the political sphere has been
organizing itself along a structure of growing complexity since the dawn of modern age.
Civil society, the specific milieu where the individual acts following his specific interests and where
economic activity takes place thanks to the interplay of those individual interest, is kept functioning
by the presence of the public authorities –in a word: the State- which allow the pursuing of private
aims by disciplining the possible sources of conflicts.
In technologically advanced contexts the issue of what can be considered economic resource has
been largely solved, while conflicts remain as to what needs and uses the resources may be called to
satisfy and, of course, how to share the benefits and costs of their use. In a technologically advanced
context water is perceived as an economic resource even by those who oppose to any or all of its
particular uses. Having solved this problem beforehand, the articulate mechanisms of contracting
which civil society and the State can put into effect are usually able to sort out the different interests
at play.
Things couldn’t be more different in technologically backward contexts, where there is no common
identification of what is an economic resource and there are no established and tested mechanisms
to allow civil society to compose conflicts and satisfy different interests.
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4.
EVALUATING LARGE DAMS EFFECTS IN TECHNOLOGICALLY ADVANCED
CONTEXTS
If the preceding analysis holds true, no description of a technological context can be carried out
without keeping into account the characteristics of its political and institutional structure, the
reciprocal feedbacks and the channels through which the two spheres interact, all the more so where
both contexts have reached a very high degree of sophistication and complexity.
In the field of territorial planning, modelling and evaluation, there seems to be the need for a
constant expansion of the variables at play and, conversely, of their evaluation methods. Without
going into the details of territorial planning analysis, the following points are worth noting:
1. Both the expansion of the variables taken into account and the modification of their evaluation
techniques call for a thorough review of the conceptual meaning of terms such as “resource”
and “value”. As long as a technical project ceases to be an exclusively economical fact, its costs
and benefits cannot be expressed exclusively in terms of market prices; new and broader
measures of value need to be devised.
2. No measure of value of a project can be limited to its direct use value, but has to include its
indirect use value (the functional benefits which it implies) its option value (its future use value,
direct and indirect), its existence value (that is, the value implied by the very fact that something
exists and will continue to exists in the future, i.e. for species on the brink of extinction, etc.).
This multidimensionality of value calls for evaluation procedures not confined to market prices,
shadow prices and existence prices, but for procedures which keep into account that the very
notion of value is prone to a conflicting interpretation: every option can be judged under totally
irreconcilable visions, and, conversely, options with the same forecasted value may imply very
different costs and benefits distributions.
3. All these aspects are kept into account in present planning schemes and techniques, such as the
CIE, Regime, Evamix, Vimda and AHP methods. These methods are addressed at expanding
the potentialities of traditional costs and benefits analysis by including new variables and
devising new approaches to their processing and evaluation. The final aim is to produce
evaluation schemes able to maximise the comparability of non-economic values.
4. These techniques cannot be perfected up to the point of allowing a total comparability of values,
options and interests. Composing conflicts will always require the setting up of mechanisms of
contracting among the different interests involved; this is the political aspect of any technical
project.
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Again, it may be interesting to note the differences between technically developed and
underdeveloped contexts.
In developing countries the insufficient evolution of a structured civil society and the great
differences in the perception of what can be considered a resource among different interest-bearing
groups call for a highly centralized decision-making process: at best, the different interests are
consulted, weighted against each other and then a decision is made at the centre.
In a technically developed environment, there is usually a broad consensus on what is an economic
resource, and civil society is already endowed with well established mechanisms, even at local
level, to mediate among different interests. In this case, the decision-making process surrounding
the hosting of technical objects within a given territory can be decentralized and articulated up to a
very high degree of sophistication. What is important is that the logic of the evaluation and decision
making processes are shared among all the interest-bearing subjects: conflicts and disagreements
still arise, but there is an already tested and recognized common ground on which contracting can
take place.
If this holds true, one cannot fail to see how studying these mechanisms of contracting at
institutional and informal levels take on a paramount importance in devising best practices for the
future planning, construction and management of large dams, addressing precisely what is outside
the grasp of traditional cost-benefit analysis.
Every process of social and political decision-making unfolds within a specific and unique context
and following a path which is determined by the specificities of the subject under discussion (e.g.,
the planning of a dam project); on the other hand, and despite this unavoidable singularity, the aim
of these processes is the same in terms of sustainable development: allowing a smooth collocation
of the technical object within a given socioeconomic context and a technological milieu both having
their own specific aims and modus operandi.
Thus defining best practices in this field with a fair degree of general application requires a broad
census of contractual procedures and institutional schemes, such as agreements drawn up by the
agencies managing the dams and local institutions, interest-bearing groups, etc. In the case of Italy,
three case studies are actually under examination, each with its specificities in terms of
geographical location, socioeconomic context, period of construction of the dams and type of
productive destination of the dam itself. These are the cases of:

The system of hydroelectric dams in Valtellina, Northern Italy, which began unfolding almost a
century ago;

the dam of Ridracoli, Central Italy, mostly aimed at supplying water to a section of the densely
populated central Adriatic coast;
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
the system of dams of the Velia consortium, in Southern Italy, where the dams were built
following specific needs arising from local civil society.
In each of the three cases the process of planning, construction and management has been flanked
by an intense activity of contracting with local authorities and interest groups, with the aim of
allowing:

a smooth collocation of the dam in the hosting territory;

a fair distribution of (economic, social, environmental, etc.) costs and benefits arising from the
presence of the dam;

the setting up of institutionalized mechanism to ensure the on-going participation of local
interests in shaping the future modifications in the dam’s life-cycle.
This kind of studies will hopefully shed some light on an often overlooked aspect of dam planning
and management, with a –hopefully- useful relevance not only in technically developed contexts,
but also in developing countries, as long as they will prove capable of devising best practices with a
fair degree of adaptability.
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