Institutional Path Dependence and Environmental Water Recovery in Australia's Murray-Darling Basin

The concept of institutional path dependence offers useful ways of understanding the trajectories of water policy reforms and how past institutional arrangements, policy paradigms and development patterns constrain current and future choices and limit institutional adaptability. The value of this concept is demonstrated through an analysis of environmental water recovery in Australia's Murray-Darling Basin, where while significant water volumes have been reallocated to the environment, the costs have also been significant. While there are significant lessons from the Australian experience, attempts to emulate the approach involve substantive risks and may be prohibitively costly for less wealthy nations. Context-specific institutional analysis is emphasised as fundamental to water reform and critical for reform architecture and sequencing. A key finding is that while crisis can provide powerful catalysts for institutional innovation, institutional path dependence in the absence of active and disruptive policy entrepreneurs fosters a strong tendency to reinforce the status quo and limit innovation, potentially exposing social-ecological systems to greater shocks due to climate change and other sources of escalating uncertainty.