As global projections for water availability and the demand for water in agriculture point towards increasing scarcity and supply variability, more attention is being paid to the role that policies can play in enhancing the management and sustainability of water - in terms of both quantity and quality. Drawing some lessons from the North American experience, this paper discusses some best practices that can be learned by developing countries, and highlights some pitfalls that should be avoided. We discuss the role that assigning water rights can play in creating the necessary incentives for market-based mechanisms of re-allocation to work for both water quantity and quality management. We also emphasise the role that remains for centralised regulatory authority, and the need for collective action to ensure that essential eco-system requirements are met. Among the examples we draw from are those of inter-sectoral transfers, conjunctive use of surface and groundwater and tradable permit mechanisms -for which we also highlight the enabling institutional requirements.
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