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©giz2012 Introduction to Enabling Environment “The enabling environment is the term used to describe the broader system within which individuals and or- ganizations function and one that facilitates or hampers their existence and performance. This level of capacity is not easy to grasp tangibly, but is central to the under- standing of capacity issues. They determine the ‘rules of the game’ for interaction between and among organiza- tions. Capacities at the level of the enabling environ- ment include policies, legislation, power relations and social norms, all of which govern the mandates, priori- ties, modes of operation and civic engagement across different parts of society.”[1] An enabling environment creates an atmosphere that allows a flourishing and sustainable water sector where people have dependable and adequate services. The country enjoys a water sector that achieves economic, environmental and social goals. Without an enabling environment, managers in a water sector struggle on a day-to-day basis just to pro- vide intermittent services that barely, if at all, meet minimal quality standards. People lack access to water, the economy is held back and the environment suffers. The UN has declared equal and non-discrimi- natory access to safe water a human right. On the path to achieve the Millennium Development Goals, we have learned that infrastructure and fund- ing are not enough. The stories are legend about failed infrastructure and water sectors that cannot be sus- tained. The reasons often have to do with ill-defined roles and responsibilities, constraints on decision-mak- ing authority, low tariffs that prevent cost recovery, lack of a common direction and lack of political will. Creating an enabling environment can unlock organi- zational and human potential and result in dramatic improvement in a water sector. Enabling environments are created at high levels of national governments. Water sector managers operate within the enabling environment. Therefore, it is im- portant for water sector managers to understand the ‘rules of the game’. While sector managers often do not have the power to create or improve the enabling environment, they can often have a voice through lobby groups and associa- tions to influence elements of the environment such as national water policy and planning. This section of the Impact Guidebook covers topics that are important to an enabling environment in five chapters: • Governance • Water Integrity • Water Sector Framework • Water Sector Management • Regulatory Framework A. Governance “The water crisis is not about water or financial scarci- ty, it is mainly a crisis of governance”[2] . What happens when a water sector lacks good govern- ance? Funds are diverted to personal use or uses that are not a high priority. Customers do not receive reli- able services at an affordable price. Employees are not treated fairly and this affects their motivation. Infra- structure is constructed poorly and the assets do not last as long as they should. Well functioning countries, water sectors or organiza- tions are always built on good governance. ”Water gov- ernance considers the political, economic and social processes and institutions by which governments, civil society, and the private sector make decisions about how best to use, develop and manage water resources.”[2] As we can see, governance is an overriding influence on the enabling environment and is carried out through