ABSTRACT
This chapter explores a logical framework to conceptualise a policy on financing watershed management to achieve Integrated Water Resource Management (IWRM). A national policy is formulated recognising the social expectations of a nation and knowledge on possibilities to achieve expectations. The trend in water sector financing has been biased towards capital investments with negligence of operational and maintenance expenditures. Respecting national sovereignty is a prime requirement of a national policy. It is ideal if finance for environmental conservation is generated within the environmental sector through revenues from resource users. Empirical observations have not been made on whether adoption of IWRM would increase the need for finances and change the processes of financing of the water sector. The conceptual expectation of IWRM is that functions related to managing the water sector should be integrated. Privatisation of water services has been vigorously promoted as a general economic policy.
