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• Droughts are periodic natural hazards caused by below-average precipitation in a region. • Drought events have created severe impacts on natural resources and economic and social activities. • Intense droughts in Spain, MDB, and California have acted as catalysts of policy change. • Recent droughts have forced the change from supply-side to more sophisticated and long-term water-conservation measures. • Spain, MDB, and California have incorporated droughts as structural elements in their water planning and management. Droughts are natural hazards characterized by a prolonged period of below-average precipitation. Water scarcity is defined as insufficient water resources to meet demands in a region. This paper examines three regions (Spain, California, and the Murray-Darling Basin in Australia) which share similar social and climatic characteristics and face severe water-scarcity problems. The frequency and persistence of droughts in these regions over the last few decades have triggered changes in water laws as well as in the behaviour of water users and managers. This paper compares the major water reforms in these regions and the achievements and failures of the various approaches implemented. This comparison shows how, despite the differences in institutions and governance regarding water allocation in the three regions, recent droughts have catalysed the creation of institutions and the implementation of sophisticated long-term measures to mitigate the impact of future droughts. A deeper understanding of the effectiveness of mechanisms and regulations is necessary to better manage droughts since the uncertain impacts of climate change will require responses of a more effective nature. [ABSTRACT FROM AUTHOR]