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About the only contribution the federal government has made to the "who decides" question is to demonstrate that it won't. Eastern states are adopting water allocation and management schemes - suitable for a resource that is not only finite but valuable. We have yet to abandon the magnificent (and perverse) paradox that water is so valuable that it should be given away free. On both water quality and water quantity issues, the Administration did attempt to give more responsibility for making decisions to the states, but, perversely, it simultaneously reduced the resources the states had available to make these decisions. It also abolished the primary institutions responsible for collecting information and promoting decisions on interstate water issues, the river basin commissions, In the end, about the only contribution the federal government has made to the "who decides" question is to demonstrate that it won't. The State Response Somewhat more progress has occurred at the state level in dealing with these issues. A number of states have begun to address the question of what they want to use their water for. Some Western states have given signs that they recognize a need for reallocating water away from such traditional uses as irrigation. Eastern states, beginning to recognize that their supplies are finite, are adopting water allocation and management schemes-often similar to those adopted long ago in the West-suitable for a resource that is not only finite but valuable. They have also begun to include more people in the decision-making process. Colorado has established its Denver Water Roundtable and New Mexico its Water Law Study Committee, each of which contains members who are not representatives of traditional water interests, The states are also generally more aggressive in attempting to deal with the question of who pays. Behind the expected political posturing, they seem to have taken the threat of cost-sharing changes seriously and have attempted to figure out how they are going to pick up more of the bill. Imperceptible-Yet Dramatic-Changes Thus changes are taking place, by necessity if not desire. On a year-to-year basis, these trends may be hardly noticeable, but when viewed over a period of 5 to 10 years, they are dramatic. A largely new generation ofWestern water managers is seriously discussing such concepts as instream flow, incentives for water conservation, markets and banks for water rights, better water management, and reallocation of finite supplies - concepts that were largely anathema 10 years ago, And they are discussing these concepts with people that they would then have dismissed as irrelevant. We have yet to abandon the magnificent (and perverse) paradox that water is so valuable that it should be given away free-but even here there is some movement. The movement toward more rational and efficient water resource policies and allocation systems will continue. Its major characteristics will be increased emphasis on better management of what we have rather than developing new sources, increased interest in markets for water rights, and a continued effort to include more parties in the decision-making process. Will we see any startling changes in any of these directions? Probably not. If there is no water shortage or other crisis, the movement is likely to be slow. If there are shortages, the movement may be faster. The direction of the movement is clear: the only uncertainty, its speed. About the author: Dr, Clark directs the water resources program at The Conservation Foundation, a nonprofit policy research institution in Washington, D,C., and was project director for the Foundation's 1982 and 1984 reports on the state of the environment. He holds advanced degrees in water resources engineering, public policy and economics, Before joining The Conservation Foundation, he held senior positions at the Environmental Protection Agency and the Council on Environmental Quality. 13