Abstract: In this study, we analysed the development of institutions under a recent draft strategy for managing water resources in Alice Springs. We used the Institutional Analysis and Development (IAD) framework, which has been developed and tested internationally for managing common-pool resources Water is a critical resource for the economic, social and ecological sustainability of desert towns. Effective and efficient water management is required, yet strategies are diverse even among the towns of Alice Springs, Coober Pedy, Roxby Downs, and the Goldfields of Western Australia, which share a similar type of groundwater resource The objectives of our study are to: 1. describe the recently developed Alice Springs Water Resource Strategy (ASWRS), and analyse its potential impact on desert water resource management institutions and outcomes 2. examine the validity and utility of the IAD framework as a guide for policy analysts and decision makers in describing and evaluating water resource strategies of desert towns 3. suggest simple methods for using the IAD framework to adapt and design institutions.