Reforming Governance and Institutions

Abstract

This chapter studies the reform of water institutions and governance. Reforming governance and institutions to meet the challenge of growing water scarcity and competing demands is at the heart of the solution to the water paradox. Water governance consists of the processes and institutions by which decisions that affect water are made. Institutions are the informal and formal rules, arising from well-established social arrangements and structures, which provide incentives and determine outcomes in both individual and collective decisions related to water development, allocation, use, and management. Important influences on water governance include legal and social institutions that protect property rights, enforce contracts, and encourage collective action for the physical and organizational infrastructure needed to manage the resource. Thus, water institutions and governance are the bedrock upon which water management is built. If the foundation of governance and institutions is strong, then good water management ensues; if it is weak, then management will collapse.