This paper focuses on understanding rule systems by documenting existing rules and their development in irrigation management in Nepal. We analyze the rule formation of a sample of irrigation systems based on the ADICO syntax (Crawford & Ostrom, 1995; Ostrom, 2005). Farmer-managed irrigation systems generally are autonomous in devising their own rules based on local context considering the ideas, norms and beliefs shared within the community. Rule formation in agency-managed irrigation systems, however, is mostly done by external officials. Strong rule enforcement mechanisms were found in farmer-managed systems compared with agency-managed systems. Better rule enforcement created favorable conditions for collective action among the users and ensured better performance of the irrigation systems. Results imply that the formation of new rules should fully consider biophysical attributes as well as community beliefs and ideas.
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