This paper considers the institutional arrangements that are needed and that being developed to enable communities to depart from sectoral and isolated water management in order to reach a higher level of integration. Key aspects are described that should be properly handled to manage river basins as a whole and in an integrated way.

The justification for various countries to opt for systems of integrated river basin management is explored. Triggers for change are identified: the need for integrated water management on hydrological boundaries; the added value of functional decentralisation enabling decision making at the lowest appropriate level; stakeholder participation in decision making and water resources planning; and cost recovery and water pricing.

Ongoing developments in processes of change are identified and described. A comparative assessment is carried out between the situation in Zimbabwe, South Africa, Tanzania, Turkey, Indonesia, France and The Netherlands. A common denominator of institutional arrangements is determined, from which developing countries in particular could benefit with regard to the introduction and establishment of systems of integrated river basin management. Sample competencies for effective functioning of river basin and sub-basin organisations are identified and described. Platforms of stakeholders with clear rules for representation and for participation in decision making in water resources planning are identified as crucial tools and described. In order to apply effective water pricing and to charge for pollution, a comprehensive system of water rights and discharge permits is considered necessary. The capacity to implement these necessary institutional arrangements is very variable, especially in developing countries, and hence the stage of implementation may differ substantially. Further, it is very important to have initial access to funds to kick-start the process of implementation. It has been found that systems of cost recovery can only be successfully introduced when acceptable service levels are established and when an enabling institutional environment is in place. Investments are needed and not all countries can afford that.

Above all, a major requirement for implementation of any institutional development is the presence of sufficient human and institutional capacity at the right time and at the right place.