Discussions of policy for the water-energy nexus focus on top down government policies with little attention to the strategies of local user groups to cope with trade-offs. Local adaptations in the Indian and Spanish irrigation sectors provide insights into how common pool resource (CPR) and polycentricity theories can inform policy design. CPR theory shows how resource users overcome collective action problems. Polycentricity theory explains successful governance as a function of the capacity to experiment, learn and coordinate actions of user groups and other authorities. Quantitative and qualitative data from the case studies make clear that water user associations can play a pivotal role in a bottom-up process of institutional evolution. For that to happen, local groups have to have some degree of autonomy, cooperative capacity and competition.
