The new approaches to water resources management that have replaceddam construction have been investigated after the 1980s in the world. Reflectingon the conventional dam development policy having brought about thedisruption of ecosystem and serious government deficits, especially this beingapplied to Japan, there is a new approach that is known as the “bottom-up”approach. As some of the concrete results of this new approach, we can point to“integrated water resource (or catchment) management” (IWRM or ICM) and“water trading market” being used as an incentive mechanism.Water trading is the most excellent re-distribution system for water atpresent in the stage to which the water resource development based on dams (Iname this type of water development system as “New Deal”-type approach.) hascompleted the adjustment of fundamental infrastructures and marginal cost ofnew water resources development came to invite government deficits andenvironmental destructions. In order to show this, the dam construction policyand water trading market were compared and analyzed theoretically.Next, ICM is a new management system based on the “bottom-up”approach aiming to integrate ecosystem preservation and economicdevelopment.Both systems were mutually related through approval process of waterdealings, and it was shown clearly that water trading serves as one componentpart of ICM, especially in Australia.Australia introduced these two systems promptly and has developed themeven into a world's largest scale today. We can point out the developmentfactors which brought about such a big change in the field of water trading asfollows.(1) Introduction of the CAP system 1(2) Neo-liberal reform to ”Big Government”, and “Corporatization” of publicservices(3) Introduction and improvement of experience of the internationalmarket-based management techniques(4) Peculiarity of the irrigation agriculture of Australia(5) Powerful support as one of the national competition policy by Governments.The experience of Australia is teaching us that the new water resourcesmanagement approach that does not depend on dams can be feasible andrealistic by both the introduction of ICM and the foundation of water tradingmarket. Furthermore, if this “bottom-up” approach (that is, market-based anddecentralized approach) can be established and extended into Japan, a “too biggovernment” for economic growth and the bureaucratic rigidity in Japan will berationalized to some extent, and a new possibility and vitality could be inspiredinto Japanese society.