ABSTRACT
Institutional arrangements for water management play a vital role in managing and sustaining water resources. Hence an important part of the water sector reforms being undertaken in India in the last decade is a focused and concerted effort at institutional improvement and institutional restructuring. Efficiency and performance of existing institutions are being evaluated and new institutions introduced through changes in the policy and legal framework. Informed largely by environmental economics and new institutional economics, the changes are promoted and funded by international financial institutions (IFIs). The World Bank, a prime mover of water sector reforms in India, has made funding to governments conditional on the implementation of large-scale institutional reforms. The Bank, however, acknowledges the challenges posed by resistance from what it calls ‘political economy factors’ and hence has initiated only strategic institutional reforms in the initial phase.1 We discuss in this chapter both the tentative and the radical new steps in restructuring the water sector institutions in India.
