Thesis (Ph.D., Natural Resources) -- University of Idaho, 2016 | Across much of the western U.S. demands for water far exceeds annual supplies. Many western states are turning to incentive-based transactions to encourage economically efficient re-allocations of water from agricultural uses to environmental, domestic and industrial uses. This research, presented across three chapters in this dissertation, explores the influence of irrigation districts on water transactions for environmental flows. Irrigation districts manage water at local and regional scales and are important in guiding individual behaviors. We propose that irrigation districts are both affected by and actively affecting new incentive-based programs that seek to influence individuals through economic incentives. Looking across institutional scales we seek to understand how these institutional interactions influence individual participation. We draw upon common-pool resource management, individual expectancy-value, and economic theory to structure our analysis and generalize our findings to other instances of institutional change.