Integrated Water Resources Management (IWRM)–inspired water reforms, culminating in the promulgation by South African and Zimbabwe of National Water Acts in 1998, emphasise second generation water issues (e.g. demand management, water quality, environmental flow requirements) not developing water infrastructure. So can such reforms make a meaningful contribution to the development agenda?

This study sought to contribute an empirical and theoretical understanding of how institutions (formal and informal), networks and resource rights are linked, organised, negotiated and contested in rural economies of South Africa and Zimbabwe. Given the present pattern and nature of investment in water infrastructure in rural communities, we also sought to determine if prevailing institutional arrangements adequately address the informality of water use.

Informed by historical analysis and review of relevant laws, policies and legislation, the study assessed the early impact of implementation of recently promulgated laws using interviews, archival research, surveys and participant observation. We analysed how people, as individuals and/or groups, assert rights over water, how such claims become legitimised, and how resource rights and access are negotiated (informal and formal) and contested.

Results showed that state funding on water infrastructure development was biased towards formal irrigation, thus catering for only a small segment of the rural population. Although local level institutional arrangements governing access to communal water sources are instrumental and represent a wide spectrum of stakeholders, local government and ‘new water management institutions’ deliberations hardly provide space for small-scale water users. Lack of sustainable revenue through levies, licenses and permits, political pressure and dissipation of public interest and participation in communal areas culminated in repeated institutional immobilisation.

Traditional leaders, elected leaders and the relevant water point committees tend to complement each other in developing and enforcing local level institutional arrangements but large and powerful commercial estates, mines, urban and industrial stakeholders dominate the business and agenda of ‘new water management institutions’. Therefore, the informality of institutions and property rights in rural water governance facilitated flexibility to allow for resource sharing — a common feature in the two study sites, but the fragmented and fluid new institutional context — where powerful and dominant commercial water users and the state sceptically co-exist with small-scale communal water users in hybrid governance system — confirms the uncertain nature, direction and sustainability of institutional transitions and property rights.