Good water governance is when a society can implement effective water management through transparent, coherent and cost-efficient policy, law and institutions. Water governance sets the ‘rules of the game’ for the way water is managed. It determines how, or even whether, sustainable water resource management is implemented. Water governance is organised according to policy, laws and institutions in a country or, in transboundary basins, among the countries sharing waters. Poor water governance, on the other hand, results in degradation and over-allocation of water resources, is a cause of vulnerability for poor people and leads to weaker and less resilient livelihoods. This can also impact on wider economic growth.
Building reform strategies around water governance capacity ensures that changes in policy, law and institutions are coordinated, internally consistent and able to catalyse progress on safe water supply and sanitation, implementation of IWRM, and a transition to sustainable water management. Transformation of water policy and management comes from consensus building in multi-stakeholder platforms. Responsibilities for water resources development and management are often fragmented over many sectors. Solutions should be cross-cutting throughout the decision-making process in different sectors and at different levels.
Duda (2002) has pointed out that where transboundary basins are involved, it is necessary to work at three institutional levels: multi-country, national inter-ministerial, and sub-national / community levels. Collaborating nations can each institute inter-ministerial technical teams to assemble information that assesses the water-related environmental problems and conflicts in their part of the basin or marine ecosystem and share this information with colleagues from other nations in a multinational committee setting. In the initial, strategic stages of a multi-country project, regional process indicators, such as establishing country inter-ministerial committees or formulating a Strategic Action Programme (SAP), may be the only types of appropriate indicators.