ABSTRACT
To understand decisionmakers’ constraints in water allocation and pricing, both physical and institutional factors have to be considered. 1 Physical factors define supply conditions and the broad spectrum of water values in relation to complementary factors, such as land endowment and population pressures. Institutional factors encompass social values and historical development of water-related issues. They usually include water-project development, conflict-resolution mechanisms, water rights, and duties. Institutions interact with decision-makers to define the scope and path for reform in water pricing and allocation, usually limiting the options available. An abundant supply of easily mobilized water usually allows decisionmakers more freedom in dealing with allocation issues.
