Political economy analysis (PEA) is an integrated approach capable of capturing the dynamic interactions among the use, control, and allocation of water, policy-making and political power. In the 12 watersheds of the Mahakali, Karnali, and Rapti (MKR) River Basins, the study examined the dynamic interactions among climatic and hydrological variability, human behavior shaped by socio-economic contexts, social arrangements, environmental and human-built systems, institutions, and politics to assess the changing political economy of water in those basins.