Rapid urbanization in semi-arid and arid areas challenges the provision of water for the urban population. Moreover, the rise in population does not only increase directly but also indirectly the water stress through a higher demand of water-intense agricultural products. This demand is often met by exploiting groundwater stocks. The consequences are overdrafted or exhausted aquifers. In order to prolong the life of the resource and to increase the long-term benefits for the users, management institutions are needed. However, these management institutions might not be stable as background conditions change during the process of urbanization. In this paper, we compare cooperative, non-cooperative and exogenous management institutions at different stages of urbanization. To do so, we have conducted a framed field experiment along the rural-urban gradient of the fast growing city of Bengaluru, India. Results indicate that both enabling and restrictive exogenous institutions are the most efficient in prolonging the life of the resource independent of the stage of urbanization. Nevertheless, the results also show that participants of more urbanized areas are more myopic than in rural sites stressing the importance of governance in these areas. Acknowledgement :