Hong Kong and Singapore provide a good comparison/contrast in this regard. In terms of their "initial conditions," they are very similar, yet they have moved along different paths. In the early 1960s, both Hong Kong and Singapore were British colonies, suffering from severe drought. Both looked to diversions from neighbouring areas to secure a water supply, but at the cost of political insecurity. Both sought to address this problem through commitment to greater self-provision. From the mid 1980s, Hong Kong abandoned this strategy. In both cities, water prices have been frozen since the beginning of the 21st century, but Singapore has covered its costs while Hong Kong has relied on subsidies. We explore this divergence from a number of perspectives, not only historical but also in terms of the underlying political, budgetary and governance features.