Watershed development is an important component of rural development and natural resource management strategies in many countries. A watershed is a special kind of common pool resource: an area defined by hydrological linkages where
optimal management requires coordinated use of natural resources by all users. Management is difficult because watershed systems have multiple, conflicting uses, so any given approach will spread benefits and costs unevenly among users. Theories
from commons research predict great difficulty in managing complex watersheds and explain why success has been limited to isolated, actively facilitated microwatershed projects with a focus on social organization. Encouraging collective action is easiest at the microwatershed level but optimal hydrological management requires working at the macrowatershed level. Research suggests potentially severe tradeoffs between these two approaches. Resolving the tradeoffs is necessary for widespread success in watershed development but solutions are not clear. Examples from India illustrate the argument.