This article discusses the problem-solving capacity of river basin cooperatives in German water policy in historical and current cases. The article builds on institutional theory and refers to the most important Water Framework Directive (WDF) of the European Union in 2000 and works back to the emergence of the first agencies in Germany around 1900. The article shows that these agencies organized a sophisticated institutional compromise between different groups of water users such as mining companies and public authorities. The Prussian state set up a complex legal framework of representation and negotiation of conflicting interests, as the article shows with the cases of the Schwarze Elster and the Erft cooperative. The second part of the paper discusses the problem-solving capacity of these old institutional structures for today’s problems such as environmental degradation and urban shrinkage. It states, by analyzing the cases of the Erft and the Rur cooperatives, that the complex mechanisms of financing and decision-making provide protection of water resources and broad agreement amongst the actors involved. The cooperatives are expanding their activities in the context of the WFD and can be regarded to be an appropriate instrument of water policy in the early 21st century.