decentralization may be expected to require some additional outlays in order to make the transition. The central government often will need to assist basin stakeholders in establishing organizations and practices that will facilitate basin management.

Furthermore, successful decentralization does not necessarily mean terminating all central government water resource management functions. Aspects of water resource management that have the characteristics of “public goods” may be efficiently provided by a central government while other aspects of water management are devolved. Weather monitoring and forecasting are examples of such services, but hydrological research, research on the health and environmental effects of water quality, and some aspects of flood control may also fit the description. Whatever the combination in a particular location, the central government is likely to continue at least some functions and services even during and after a decentralization reform. Indeed, the success of the decentralization reform may depend upon the maintenance of those centrally provided functions.

The level of economic development of the nation is therefore an important contextual variable, to the extent that it affects the financial capacity of the central government to bear transition costs of the decentralization initiative and ongoing costs of functions that support and facilitate basin-scale management. All other things being equal, we would expect decentralization initiatives to be more likely to achieve sustainable success where the economic well-being of the nation allows the central government to bear those costs.

_Level of economic development of the river basin_ Decentralization also requires some commitment of financial and other resources from basin stakeholders. Developing and maintaining basin-level institutional arrangements for water allocation, water quality protection, monitoring and enforcement will not be costless. Even if the central government provides transitional or ongoing financial support, any true decentralization effort is likely to require some commitment of resources from basin stakeholders.

Furthermore, the literature on decentralized water resource management indicates that effective decentralization must include some degree of financial autonomy. Sustaining this autonomy often depends upon establishing some form of water pricing or tariffs. Implementing a water pricing or tariff regime entails requiring at least some water users to pay for a resource they previously consumed for free or at greater subsidization.

Thus, developing and maintaining the institutional arrangements for basin-level management, and implementing any form of financial autonomy, imply that some financial resources at the basin level will have to be committed to the decentralization effort. This in turn implies that basins where stakeholders can sustain those commitments are (all other things being equal) more likely to achieve sustainable success.

# _Distribution of resources among basin stakeholders_

The literature on natural resource management also indicates that the initial distribution of resource endowments among the basin stakeholders is an important contextual factor 8