Towards the achievement of promoting capacity building for constructively engaged IWRM, INECO focuses on institutional and economic instruments for addressing issues (or focal water management problems) related to three management dimensions (Figure 1):

• Sharing water, referring to the mechanisms (institutional, regulatory, legislative, economic) in place for water allocation at the river basin level (between uses), at the service provision level (between users) and at the transnational level (if relevant).
• Valuing water, referring to the assessment of costs and values in water use, the maximisation of economic efficiency, the implementation of the cost-recovery principle for supporting sustainable water service delivery, and the implementation of the user-pays and beneficiary-pays principles.
• Governing water wisely, referring to the provision of an environment that enables IWRM implementation and focusing on the aspects of:
  • Participation of all citizens in the decision-making process, either immediately or through organisations representing their interests;
  • Decentralisation and application of the subsidiarity principle;
  • Transparency of water-related decisions, especially in relation to water allocation, water service revenue and investment capital allocation, and definition of water charges;
  • Equity, ensuring that all citizens are being treated equally and have equal opportunities in water use;
  • Accountability, with regard to decisions taken;
  • Coherence and integration between policies and goals;
  • Responsiveness with regard to changes in demand, supply, development goals or extreme hydrological events.  

Figure 1: The overall INECO framework

From the above list,  it becomes evident that each instrument or goal impacts to different levels of society, refers to different aspects in water systems management, and has different effects on the causes that contribute to focal water management issues. In this regard, the project has adopted a three-level approach for determining alternatives which could address selected focal water management problems in the participating countries (Figure 2):

• The operational or water use functional level, which focuses at the use or control of water for specific purposes. These can include water supply and sanitation, irrigation and drainage, flood protection services, hydropower, industrial supplies, water for tourism and recreation, fisheries, navigation and the preservation or rehabilitation of ecosystems.
• The organizational or water resource management functional level, which ivolves the coordination, planning, decision making and policing of water use and users in water systems (river basins and aquifers).
• The constitutional or water policy and law functional level, which provides the enabling environment for the successful functioning of the system, and includes the development of water policies, institutional policies, including human resources development, and normative and executive legislation.

Figure 2: Functional levels in an IWRM analysis framework
(adapted from Hofwegen P. and Jaspers F., Analytical Framework for Integrated Water Resources Management - Guidelines for the assessment of institutional frameworks, Balkema Ed., 1999)