I started this paper in Riyadh, where I was trying to understand the government's policy of providing ridiculously cheap water.
Please read it and tell me what you think (where I'm unclear, what ideas are useful, data corrections, etc.)
Title: Rational Waste: The Political-Economy of Desalination
Abstract: This paper explores the economic and political dimensions of responding to water scarcity by increasing supply rather than reducing demand with examples from San Diego (US), Almeria (ES) and Riyadh (SA). Each case explains how leaders benefit by obscuring the costs of desalinated supplies. In San Diego, marginal costs are diffused among customers. In Almeria, they are absorbed by a government eager to reduce unsustainable groundwater use. Rulers in Saudi Arabia, meanwhile, absorb costs in exchange for political quiet. Each case discusses potential means of extending current policies (greater regional trust, improved groundwater condition, and reduced agricultural irrigation, respectively) as well as reforms to facilitate the adoption of policies with lower economic and social costs.
You can download a copy here