Evaluating water institutions and water sector performance

Although the international water sector globally consists of a variety of organizational structures, with countries usually having one dominant traditional structure, which usually changes only gradually over time, the water sector as a whole has been undergoing rapid changes in the past few decades. While past achievements were associated mainly with investment in new physical structures, more recent developments in the water sector are associated with improved management and institutional changes. Although both the nature and direction of these institutional changes vary by country-specific economic, political, cultural and resource realities, there are clearly identifiable trends and patterns. This report presents a methodology that sheds light on the process of institution-performance interaction. It demonstrates the use of the methodology by applying it to an extensive cross-country data set, and by deriving policy guidance based on the results.
An analytical framework identifying various layers of institutional inter-linkages and institution-performance linkages evident in the process of institution performance interaction within the sector is elaborated. Analytical and empirical analyses are used to identify key inputs for the development of a generic strategy for institutional reform. The results provide several major insights : they indicate the relative strength, direction, and significance of the performance impact of institutional components and institutional aspects, they suggest that the institution-performance interaction can derive from the general socioeconomic, political, and resource-related environment within which such an interaction occurs, and they strongly favor a sequential strategy for institutional reform in general and for water institution in particular.