In Thailand, water is life. Recently however, water has been more associated with conflict and problems, both natural and manmade, from drought to floods to dams to pollution. This paper investigates two major problems related to the management of water resources, dry-season allocation and water quality. In Thailand, water allocation has been considered an administrative problem and solutions have largely been supply- oriented. Economic instruments have not been used to solve them. In dealing with water quality as well, economic instruments have Largely been neglected. This paper outlines some of the major problems of water use in Thailand, including conflicts over the quantity and quality of water. It provides some examples of both the political and economic consequences of government policy, specifically the "open access" regime which ignores the true costs and benefits of various types of water use. The paper then goes on to discuss economic instruments for the management of water resources, especially water pricing and pollution charges. Finally, the paper presents conclusions to be drawn from the various studies of water resources in Thailand.