"Nature makes a drought, but Man makes a shortage." That's the trenchant slogan that the Leiden University College water resource economist David Zetland uses to sum up how bureaucratic mismanagement of supply and demand misallocates water pervasively. California's current water crisis—exacerbated by a three-year drought—is a perfect illustration of Zetland's observation. The chief problem with water is that it mostly supplied by government agencies or government-sanctioned monopolies whose prices are deliberately held below the actual costs of supplying water. Reason science correspondent Ronald Bailey explains how secure water rights and robust water markets can end water shortages.