Effective water governance capacity is the foundation of efficient management of water resources. Water governance reform processes must work towards building capacity in a cohesive and articulated approach that links national policies, laws and institutions, within an enabling environment that allows for their implementation. This guide shows how national water reform processes can deliver good water governance, by focussing on the principles and practice of reform. RULE guides managers and decision makers on a journey which provides an overview of what makes good law, policy and institutions, and the steps needed to build a coherent and fully operational water governance structure.