A recurring theme in recent Australian reports on integrated catchment management (ICM) has been the need to institutionalise more formally the cost-sharing commitments made within this domain. This represents a significant departure from earlier visions of ICM as essentially promoting voluntary uptake of resource-conservation measures. Two important questions raised by this nascent policy shift are addressed in this paper. Firstly, how might cost-sharing arrangements be given greater formality without undermining the efforts of ICM to increase the preparedness of civil stakeholders to voluntarily, or informally, accept responsibility for sharing costs? Secondly, how is it possible to formalise cost-sharing arrangements so that the transaction costs of enforcing compliance with them remain affordable? Answers to these questions are explored through a case study of the Land and Water Management Planning Program now being successfully implemented in the irrigation districts of the central-Murray region of southern inland New South Wales (NSW) surrounding Deniliquin. The sophisticated system of institutional arrangements introduced in the program to facilitate monitoring, enforcement and adaptive management of cost-sharing commitments is discussed, and insights into how informally motivated cooperation can enhance the affordability and political feasibility of formal arrangements are presented.

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