System dynamics is one of the modeling methods that has become popular in water resources modeling in recent years due to its ability to consider various aspects of the system. The first step in developing a dynamic system model is to develop “dynamic hypotheses” or causal loop diagrams (CLDs). This step poses some challenges as follows: a wide range of knowledge is required to develop these hypotheses; the affecting and affected components in each field are not predetermined; modelers develop the CLDs based on their assumptions. These challenges may exclude the main affecting components on the system in the models. The present study aims to address these challenges through the development of dynamic hypotheses using the grounded theory approach. The grounded theory provides a holistic and comprehensive view of the system through a systematic qualitative process. Therefore, to demonstrate the effectiveness of this method, the proposed process was implemented in the Zayandehrud basin as one of the most complex basins in Iran. After developing the hypotheses, their accuracy was ensured by providing quantitative data. It is noteworthy that the proposed method has proved satisfactory in showing the main problems of the natural and human system in the Zayandehrud basin and the connection between these problems. Moreover, the main problems in socioeconomic system of Zayandehrud basin, which have been less studied in previous researches, include: population growth, immigration, rising per capita water consumption, growth of the industrial and agricultural sector, improper development of pressurized irrigation systems, changing the water allocation to an unfair pattern, and rising unemployment.
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