The focus of this chapter is not the fine-scale management of urban water or the detail of water consumption behaviours. Other contributions in this book do that. It discusses, rather, the settings that do much to determine management and behaviour — policy processes and interventions, institutional systems through which these are negotiated, and patterns of governance that surround these. We talk of ‘water management’ but it is really about managing people, whether individually or collectively in households, firms, communities and cities.

Some clarity helps. Water policy is in the news a lot, and policy interventions of all kinds are proposed. Policy interventions are always a form of social engineering to greater or lesser extent, and are thus interventions in society. This discussion follows the definitions of policy, institution and related terms used in Connor and Dovers (2004) and Dovers (2005). Policy interventions are intended to change human behaviour in order to further some social, political or policy goal, whether that goal is clearly apparent or widely shared or not. (Also, policy interventions almost always have unintended and multiple impacts, such as on water consumption, and some such will be noted as we proceed.) Whether a tax incentive is used, an educational campaign or strict regulation, a subsidy to a water-efficient technology or any other specific policy instrument — the point is to encourage, enable or enforce behaviour change on the part of individuals, households, demographic strata, firms, professions, communities, organisations or governments themselves. Policy instruments are messages, conveying information whether in the form of a threat, exhortation, appeal to generosity, mildly suggestive signpost or blaring claxon (Dovers 2005). The strength may vary but the intent does not: a harsh and confronting advertisement is a strong message, just as strong as a strict regulation and hefty fine or a large tax impost.

It should always be remembered that policy interventions in urban water seek to drive some very widely distributed and highly personal behaviours embedded in daily lives and close environments — washing bodies, cooking and cleaning up afterwards, going to the toilet, creating pleasant backyards to live in. Changing behaviours is serious business, and doubly sensitive and difficult when it gets personal. The most apparent urban impact of drought from a local government management point of view is grass, in parklands and especially on sporting fields and in swimming pools. Recreation and sport may seem to some trivial, but are hugely important socially, culturally and economically, and in answering their local democratic imperatives, do not doubt that local government councillors know this very well.

To decide not to make a policy intervention is a message also, confirming existing behaviours, as does a supply-side response (dams, desalinisation plants, groundwater tapping) that does not interfere with and indeed encourage continuation of use patterns. That is again a conscious choice regarding human behaviour, even if apparently unthinking. This clarifies what water policy and management is about, and weighs against the all too common and simplistic debates around the relative merits of different classes of policy instrument — regulation doesn’t work, education is the most fundamental approach, leave it to the market, etc. What is the best medium for the message; or what is the best mix of instruments to convey the message effectively, clearly and fairly? Here I will take a non-discriminatory approach to policy instruments, accepting all as possibly valid, without favouring, as many do, one class of instruments (regulatory, market, educational). Better to consider first the nature of the problem and the desired ends, and then consider the means (policy processes and instruments, technologies and management strategies, institutional forms).

Policy interventions emerge from policy processes shaped within institutional systems and by governance. At this higher level of organisation and abstraction, it is equally all about human behaviour. Institutions are how we manage and structure transactions in a manageable and orderly way. These transactions are social, legal, economic, formal and informal. Seeking sustainability is more than anything an issue of institutional change (Connor and Dovers 2004). Governance is the way in which the state, private sector, civil society and public interact to lead to decisions about institutional reform and policy directions — how human behaviours are managed. We undertake collective endeavours and reconcile differences (or fail to) through institutions and processes of governance — water policy is no exception.