Economic instruments for environmental quality management have received widespread attention in the Central and Eastern European (CEE) countries as a means of achieving improved environmental quality at the lowest cost. This paper describes the economic instruments currently used in water quality management -- charges, subsidies and effluent trading, then reviews the experience of Western countries in exercising these policies. The paper further identifies new institutional developments aimed at achieving more effective environmental quality management. Based upon this experience with both instruments and institutions in Western countries, lessons are offered for improving water quality management policy in Central and Eastern Europe
