SummaryWater resource allocation and management options differ greatly according to the diversity and the strength of an economy. They also differ with respect to trends in the acceptance of principles of environmental sustainability. Diverse and strong economies have options which are not available to economies which lack diversity and are heavily dependent on agricultural, often irrigated, production and livelihoods. This article will illustrate this with a case study, from the Middle East and North Africa, which shows that, within a period of three decades, an economy can move from total commitment to water security to one in which policies and practice on the allocation and use of water are based on principles of allocative and productive efficiency as well as environmental sustainability. It is concluded that those negotiating for water, whether the negotiations are legally principled or politically pragmatic, should be negotiating to gain flows of economic resources which enable sound livelihoods. From such flows come the options to maximize the social and economic returns to water and other inputs.The author recognizes that the ideas presented here will take a decade or more to become widely accepted by those operating in real political economies. It is suggested, however, that those attempting to press the utility of legal principles and instruments should take into account the dynamic nature of actual political economies. They should also contribute to the development of legal regimes which promote the appreciation of the social and economic value of water and especially of‘virtual water’to national and regional economies. They should not devise principles and rules for abstract hydrologies.Water for us is life itself. It is food for the people ‐ and not food alone. Without large scale irrigation projects we shall not achieve high productivity, balancing the economy or economic independence. For without irrigation we shall not produce a wealthy agriculture … we shall not be a people rooted in the land, secure in its existence and stable in its character.Prime Minister Moshe Sharett, 19521Ideas on food security and self‐sufficiency are of the 1950s and 1960s, not of today.Avram Katz‐Oz, Former Minister of Agriculture2