The Water Sector Nexus Trap

How old are you? If you are reading this, you might fall within what I call the nexus era, a period in which integration became the standard answer to almost every development-related problem. In this blog, I focus on integration interventions in the water sector. While integration remains a worthwhile aim, this piece asks why successive integration agendas have done so little to change the incentives that determine inter- and intra-sector cooperation.

Since the early 1990s, the water sector has moved through a series of integration agendas with the hope of achieving the "nexus ideal".

• 1992, Integrated Water Resources Management (IWRM). Established as a global norm at the Dublin Conference.

• Mid-1990s, Sector-Wide Approaches (SWAps). Brought governments and donors into a single program.

• 2011, Water-Energy-Food Nexus. Arrived at the Bonn Conference.

• After 2015, Citywide Inclusive Sanitation (CWIS). Called for sanitation to be planned and run as a citywide public service.

• 2026, Water Forward. Launched by the World Bank Group in April, it centers on national water compacts that promise water for people, food, and the planet.

Other related agendas could be added, including integrated urban water management, water security, Sanitation and Water for All (2010), source-to-sea management (2014) and One Water (2016). These initiatives differ in scope, but they share a recurring theory of change. Fragmentation is the problem, and integration is the remedy.

Each wave starts from the same diagnosis. Water is managed by many institutions with separate mandates, and these institutions need to be brought together. The prescription is normative, as synergy is assumed to be both desirable and achievable. Signing and launching commitments are usually the low-hanging wins that draw renewed hopes that get crushed during implementation because we only sell an ideal narrative without changing the underlying institutional incentives.

A ministry may support a common plan but retains the same budget, mandate and accountability arrangements that make cooperation difficult in the first place.

Integration has delivered less than promised

IWRM is the one wave with a global measure. Under SDG indicator 6.5.1, the world’s average implementation score rose from 49 in 2017 to 57 in 2023, according to UN-Water’s 2024 progress report. At that pace, the world reaches about 67 by 2030, well short of the target range of 91 to 100. Finance is the weakest dimension, and half of all countries still lack effective cross-sector coordination.

The other waves have less to show. A 2015 review found that nexus work had largely remained a paper exercise. The authors of the CWIS framing paper acknowledge that its improved outcomes remain unproven, and there is no independent evaluation measuring service outcomes attributable to it yet.

Integration agendas ask agencies that are formally independent of one another to work together. None of them can order the others to cooperate, so whether they do depends on what each expects to gain. Research on cooperation between local governments offers one explanation.

When cooperation is voluntary, an institution joins only when what it gains from acting jointly exceeds what it gets from the status quo.

In my work on inter-municipal cooperation, I distinguish two kinds of benefit that actors weigh before they cooperate. The first is the joint benefit, the shared outcome every party receives when a common problem is solved. The second is a personalized gain, an additional monetary or non-monetary benefit such as a financial incentive or political capital, which accrues to a particular actor because cooperation happened. Cooperation emerges when the two align.

Joint benefits alone are a weak basis for cooperation to achieve any integration agenda.

In a comparative study of three African metropolises, findings show that either financial incentives or political alignment between officials and the principals they answer to was sufficient for cooperation to succeed. Personalized gains (incentives) are the most realistic drivers of inter- and intra-sector cooperation.

A ministry of water, a ministry of agriculture, an environmental regulator and a utility behave in line with incentives and not a promise of "the greater good". Each has its own mandate, budget line and line of accountability. Agreeing on a shared vision changes none of these. Unless an integration agenda alters what each agency gains, the rational response is to endorse the framework while continuing to work to its own mandate. This is the cycle I call the nexus trap.

The nexus trap

Fragmentation is the quickest diagnosis when seeking solutions to sector inefficiency, and integration is usually the fastest prescription. Water sector governance is quick to recommend coordination platforms, plans and committees, and leaves each agency’s incentives where they were. When integration underdelivers, the shortfall is then read as proof of persistent fragmentation, and a new integration agenda is launched under a new name.

The instrument has changed from wave to wave: basin plans, pooled funds, nexus assessments, stated mandates and, most recently, investment compacts. One limitation that runs through these approaches is that none tied money to results that required agencies to act together.

CWIS is the instructive case, because its framework includes enabling conditions such as a mandated authority, accountability for performance, and resources tied to that mandate. Even so, it stalled where law and budgets stayed put. In Colombia, sanitation law still defines the service as sewered collection, which keeps non-sewered options out of subsidies (Saker et al.,, 2022). In Kampala, mandates remain split between the city authority and the utility, with no regulator (Franceys and Eales, 2022). Naming the right conditions on paper did not change anyone’s payoff.

Water Forward and the water compacts it brings together

Water Forward is the World Bank Group’s latest integration agenda. It is a coalition of countries, multilateral development banks, the private sector and philanthropies, and it organizes the Bank’s water work under three pillars: Water for People, Water for Food and Water for the Planet. Its country-level instrument is the water compact. Compacts predate Water Forward, and South Sudan signed a head-of-state water and sanitation compact in 2024 under the Heads of State Initiatives. Water Forward folds this instrument into its pillars. The Bank describes the compact as a government-led action plan that connects “policy reform, institutional strengthening, and investment planning in one coordinated framework.” The stated aim is water security for up to one billion people by 2030. The compacts are where the nexus logic of Water Forward is meant to become practice.

However, the early Water Forward compacts raise the same questions. Of the 19 compacts published in full, none specifies finance tied to results that need more than one agency to deliver. Only Mozambique puts a price on its coordination mechanisms, US$1.24 million against a need of about US$4.6 billion, and only Chad’s is signed by a finance minister. In Côte d’Ivoire, Guinea and Senegal, the food pillar is handed to a separate agriculture compact, so the pillar that sits under another ministry is the one left out.

The pillar with the most diffuse benefits will usually lose out. Water for the Planet is the most exposed because it receives the least attention. Catchment protection and pollution control produce benefits that no single agency can claim, which is the classic setting for free-riding. Water supply connections and irrigated hectares are easier to attribute to the agency that delivered them. When pillars compete for attention and money, the planet pillar is the one most likely to slip. This pattern reaches beyond water. A 2024 study of the EU’s twin green and digital transition found that pairing the two pushed problems such as biodiversity loss and water pollution down the agenda, because they are not digital challenges.

Sector-integrated agendas must be built around institutional incentives and benefits

The nexus era has not delivered the efficiency it promised. In the water sector, in the few cases where positive strides were made, the institution that controls the money became a party to the arrangement. Ethiopia brought its finance ministry into the agreement behind its One WASH program. Zambia allowed a sanitation surcharge on water bills.

Another integration agenda has arrived and it will not be the last one. The test worth applying to the Water Forward agenda is whether it addresses the incentives that drive institutional cooperation and puts in place mechanisms that reward cooperation among implementation agents.

For the compacts emarging from this agenda (about 20), success is possibe with four intentional design choices:

• Tie part of the financing to outputs that need more than one agency to deliver.

• Make the finance ministry a party to the compact, with a role beyond mobilizing resources.

• Give each Water for the Planet commitment a named owner with its own budget.

• Evaluate earlier integration efforts in the same country before launching the next one.

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DISCLAIMER: The views expressed in this blog are those of the author and do not necessarily reflect the official position of Governance and Development Advisory, or any institution with which the author is affiliated. This piece is written in a personal capacity to contribute to critical dialogue on water governance.