Data on transactions costs and time delays involved in satisfying New Mexico’s administrative criteria for determining hydrological impacts of proposed changes in water use were collected and analyzed. The data revealed that most such proposals are processed cheaply and expeditiously, and that hydrologic factors were not a significant determinant of either time delays or costs. Institutional analysis and interviews suggested that the lack of definition of hydrologic criteria may be based on the lack of defined social criteria for the public objectives of state water management. Some approaches to giving content to these public objectives are explored, particularly regional water planning and public education. As an example of an approach to the latter, a computerized model of the SEO criteria which links the two-dimensional finite difference hydrologic model of the Mimbres basin to the SEO criteria for the basin was produced, with a user manual which is accessible to water right holders or interested policy analysts. Some policy applications of this model are explored.