By Andrea Bues

This paper aims to analyse the impacts of agricultural foreign direct investment on the local institutional setting of water management in a country in which most of the population depends on agriculture. It presents the case of a small-scale irrigation scheme in Ethiopia where floricultural and horticultural farms have started to use the same canal water as local farmers. The study found that the institutional arrangement changed towards a setting that distributionally favoured the investment farms and led to a shift in blue and green water rights towards the foreign actor. This institutional change is explained by the diverging bargaining power resources of the actors.