The Mediterranean region has embarked on numerous large-scale projects to meet its increasing demand for potable and agricultural water. Yet the increase alone is not enough to ensure continued socioeconomic development and growth, requiring a more holistic model for managing water resources. This need formed the basis of the goal of the EU-funded project 'Institutional and economic instruments for sustainable water management in the Mediterranean region' (INECO). Based on European directives, INECO supported capacity building for integrated water resources management (IWRM) by establishing a powerful network of public authorities, institutes and other stakeholders across the Mediterranean. It evaluated proposals using several relevant case studies to articulate key policy requirements that would further the field. In more specific terms, the project supported intensive exchange of information on water management, analysed governance structures, examined water allocation mechanisms and evaluated related economic instruments focusing on social objectives. It then developed guidelines covering specific regional needs on how to apply proposed alternatives to current water management systems. INECO undertook extensive research on related literature and conducted intense field work to develop an assessment methodology for institutions, articulating a common framework to achieve its aims. It selected the most relevant case studies, devised performance indicators and organised stakeholder workshops to disseminate its results. Subsequently, the project analysed institutions and economic mechanisms that are related to water management, leading to the articulation of better solutions and recommendations in sustainable management practices. Topics addressed included cost optimisation for providing water and infrastructure, environmental taxation, incentives for water saving and stakeholder involvement. With these recommendations and project findings, supported by a final project conference, the prospect of integrated water management is much more likely to become a reality.