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Zayandeh-Rud River Basin is one of the most important basins in central Iran, which has been continually challenged by water stress during the past 60years. Traditionally, a supply-oriented management scheme has been prescribed as a reliable solution to water shortage problems in the basin, resulting in a number of water transfer projects that have more than doubled the natural flow of the river. The main objective of this study is to evaluate the reliability of inter-basin water transfer to meet the growing water demand in Zayandeh-Rud River Basin. A system dynamics model is developed to capture the interrelationships between different sub-systems of the river basin, namely the hydrologic, socioeconomic, and agricultural sub-systems. Results from simulating a range of possible policy options for resolving water shortage problems indicate that water is essentially the development engine of the system. Therefore …