In this presentation, Prof. Zilberman will discuss the evolution of water policy in response to concerns about population growth, environmental preservation, and budgetary constraint. He will introduce principles for sound investment in water projects and argue that to achieve sustainable water use, water policies and institutions must be reformed. Concerns about adequate water supply can be addressed through better management of existing sources. The speaker will then present, based on his extensive research in water economics, incentives and policies to improve water project design, water conveyance and pricing, micro level choices, and water quality. The major points will be supported by evidence from California and both developed and developing countries.