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The transfer of successful water market governance between international settings is increasingly attractive to policy makers under globalization. This paper tests lesson-drawing approaches to water market governance transfers using data from Spain and the Murray-Darling Basin, Australia. Spain is the blueprint country for water market adoption in Europe, while Australia is often presented as a world leader in innovative water market arrangements. A preliminary comparative analysis framework linking water market governance principles to observed institutional arrangements and outcomes is provided. Finally, some key lessons, problems and policy transfer potential to stimulate and enhance Spanish water markets from lesson-drawing approaches are drawn, with an emphasis on adaptive capacity as an institutional performance metric. We find that Spain's current water governance institutions and arrangements offer a solid platform for marketing reform, where some key adaptive capacity constraints are able to be addressed. The lessons drawn from this study highlight those areas of change which, while challenging, can be achieved in our view. • Lesson drawing methods offer a novel way to assess adaptive capacity in policy settings. • Australia's water markets provide a case study for comparing Spain's readiness for water market adoption. • Current institutional strengths and weaknesses are identified via the analysis. • Future adaptive capacity evaluation offers useful insights for water governors and policy-makers. [ABSTRACT FROM AUTHOR]