Blue Gold for whom?

Multi-level games in the development of Himalayan hydropower

Abstract

The development of hydropower projects that bring about transboundary benefits is contingent
on more than just an alignment of interests in direct negotiations. Factors exogenous to the
negotiation process influence the positions each actor develops, and the priority it places on these
positions vis-a-vis other national interests. States play multi-level games and are thus subject to
the influence of domestic concerns, non-water related interests, global trends, pressures from
non-state actors, and dynamics of transnational networks. In the case of India’s pursuit of energy
security through the development of hydropower capacity in Nepal and Bhutan, the possibility
of positive-sum outcomes has been affected by considerations on multiple socio-political levels.
Both Nepal and Bhutan see the sale of their ‘blue gold’ to energy-hungry India as the key to
socio-economic prosperity. Yet the alignment of interests between these three players has not
created an even spread of mutual benefits. While Bhutan has strong domestic support for
hydropower development and has succeeded in establishing a pattern of non-zero-sum thinking with
India, Nepal’s water interactions with the hydro-hegemon remain mired by lack of domestic
consensus, socio-political instability, and lock of political trust between the two countries.