The paper examines the nature and performance of participatory water institutions in eastern India using structural equation modelling. There is a crisis in the management of water in India, and this is often not about having too little water but about managing it poorly. It is now being widely recognized that engineering structures and solutions are not enough, and having effective water institutions is critical. These are urgently needed in eastern India for helping lift the region out of low incomes and poverty. However, creating good institutions is complex, and in this context, the fundamentals of new institutional economics, and management governance theory have suggested the importance of a number of key factors including five institutional features and eight rationalities. Based on this, a study was conducted in eastern India, sampling from the states of Assam and Bihar, covering 510 farm households across 51 water institutions. In order to understand and map the relationship and pathways across these key factors, a structural equation model is hypothesized. In the model, the five institutional features are considered determinants of the eight rationalities, and the rationalities are considered determinants of four performance goals. The performance on the goals determines the overall performance/success of the institution. Besides this, the institutional features and rationalities can also directly influence performance on the goals and the overall performance. The model is tested with data from the survey and different pathways that are robust are identified. The results can provide useful insights into the interlinkages and pathways of institutional behavior and can help policy and institution design for delivering more robust performance. The results show that one of the most important factors determining overall performance/success is technical rationality, and this deserves great attention. It includes technical expertise, sound location and quality of structures and equipment, and good maintenance. However, success is also strongly linked to performance on production/income goals, equity, and environment goals. These are, in turn, strongly related to achievement of economic, social, technical, and organizational rationalities, which call for attention to economic aspects such as crop choice and marketing, besides social aspects such as inclusion of women and poorer social groups, and organizational aspects such as member involvement and regular meetings. Further, the institutional features of clear objectives, good interactions, adaptive, correct scale, and compliance are important for achievement of almost all rationalities through various pathways, and should be strongly focused on in all the institutions.
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