Role of Unauthorized Informal Institutions in Urban Water Governance: The Case of Faisalabad, Pakistan

Groundwater scarcity is an escalating global crisis, particularly in urban areas where municipal water systems struggle to meet rising demand. The existing literature attributes water insecurity, including groundwater depletion and inadequate piped water supply, to poor governance. This study examines, Faisalabad, Pakistan, where the unreliable, intermittent piped water system has led to heavy reliance on groundwater, to assess how formal and informal institutions shape urban water governance. Using the Institutional Analysis and Development (IAD) framework alongside Ostrom’s design principles, the analysis identifies institutional weaknesses in local water management. The findings show that informal institutions have usurped power from formal authority, underscoring the pivotal role of informal institutions. To overhaul the governance system, the study advances two policy recommendations: (1) a “Big Bang” approach to replace the current municipal water agency with a new institution grounded in impartiality, and (2) State-Reinforced Self-Governance, through which government enables communities to collectively self-govern the aquifer.