The objective of this paper is to identify the type of barriers related to the implementation of a new Water Law in Nicaragua. By exploring the perceptions of 40 actors involved in the drafting process of the Law, this paper finds that major barriers are related to the power configuration of the water administration set-up, which creates conflicts of competences within government and at local and national levels. Our research suggests that decision-making is highly centralized, whereas local governments remain unpowered despite their relevant role in water management. One of the particular novel aspects of this paper is the linking of interview data to grammar-coded institutional statements along the social–ecological systems' variables. The institutional grammar tool is used to identify the institutional statements of the Nicaraguan Water Law and to connect the interview results to the institutional configuration of the Water Law. This allows us to understand to what extent the Water Law modifies both the formal and informal institutions that are in place.

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