Many cities around the world are increasingly subject to water-related risks. Copenhagen and New York City were hit by floods in 2011 and 2012 with severe economic losses. Mexico City is challenged by serious aquifer contamination, while cities in California are in the midst of the worst drought in the state’s history. These crises are only a harbinger of things to come. Future crises will be exacerbated by economic, population, climate and urbanisation trends. Technical solutions to manage supply and demand exist and are generally well-known. Today, the key challenge is to align incentives and choose the relevant policy instruments to move from crisis response to adequate management and anticipation of water risks. This implies a critical role for robust public policies across levels of government and for shared responsibility among stakeholders as specified in the OECD Principles on Water Governance.

Too much, too little or too polluted: more and more, this characterises the key water challenges facing cities. Urban areas currently host about 50% of the global population, projected to reach over 60% by 2050. Over this same period, water demand will increase by 55% globally, and about 4 billion people will be living in water-stressed areas. This means that fierce competition across different categories of water users - particularly agriculture, energy and urban dwellers - is unavoidable. It also means that if nothing changes, water security will be increasingly threatened.

Intensifying water competition across users (e.g. households, farmers, urban dwellers and industry); renewing ageing infrastructure, restoring the ecological status of water bodies; preserving ecosystems; and maintaining adequate access to, and quality of, drinking water and sanitation services, all require a dynamic analysis of who does what, at which level, how and with whom, to assess whether governance structures are wellequipped to deliver intended water policy outcomes. This chapter sets the scene and argues that some characteristics exogenous to the water sector, namely size, spatial patterns, demographic dynamics and metropolitan governance arrangements, can affect water management in cities.

This chapter analyses key factors affecting water management in cities. These endogenous and exogenous factors shape urban governance by requiring adaptation to changing circumstances, in terms of capacities, data collection, information disclosure and stakeholder engagement, amongst others. The chapter argues that understanding the factors shaping urban water governance can help to devise more effective answers and determine priorities, and concludes with an overview of the challenges cities are facing or are likely to face according to their features by size, spatial patterns, demographic dynamics and metropolitan governance.

Understanding who does what, at which level and how in water policy design and implementation is a first step to identify potential mismatches, overlaps, grey areas and to suggest ways forward for better co-ordination across multiple scales, authorities and policy domains. This chapter provides an institutional mapping of key water management functions in surveyed cities, by analysing the allocation of roles and responsibilities of central governments, local governments, service providers and other actors at the subnational level for drinking water, sewage collection, wastewater treatment, drainage and water security.

This chapter identifies and analyses the primary governance bottlenecks cities face to effective water management within the context of the OECD Multi-level Governance Framework, “Mind the Gaps, Bridge the Gaps”. Such gaps are related to questions of scale mismatch (administrative gap), silos and fragmentation (policy gap), diverging rationales and objectives (objective gap), asymmetries of information (information gap), lack of capacity (capacity gap), insufficient resources (funding gap), integrity and transparency (accountability gap). This chapter portrays their relative importance across the 48 cities surveyed and paves the way for policy responses suggested in Chapter 5.

Water is a fragmented sector where co-ordination is essential to manage interdependencies across multiple scales, responsible authorities and policy domains. This chapter presents and discusses a range of co-ordination mechanisms that can be employed to overcome fragmentation and identifies to what extent cities surveyed in this study use them. These mechanisms are described under the umbrella of the 3Ps framework: co-ordination across policies, places and people, with particular emphasis on rural-urban partnerships, metropolitan governance and stakeholder engagement.