Learning from the experiences of other jurisdictions has become a common strategy in the face of increasing severe environmental problems around the world. This phenomenon is very common in the water field, where surveys of institutions in other jurisdictions are widely used by practitioners to identify models that can be adopted. A precondition for success in policy transfer is careful consideration of the context within which institutions were developed. This paper explores the importance of context using the example of institutions for environmental water allocation (EWA) in the Murrumbidgee Catchment, in NSW, Australia. The case of EWA in the Murrumbidgee Catchment clearly demonstrates that, in the context of water policies, biophysical considerations must be considered alongside political, social, economic and cultural considerations when evaluating the extent to which water policies designed for one setting can be adopted elsewhere.