Southern African countries have been experienced several problems regarding the management of their river basins. In order to mitigate these problems, during the past 15 years, most of the SADC countries have adopted comprehensive reforms in the water sector towards decentralization of river basin management through changing water related institutions. However, the impact of those institutions on decentralization process of river basin management is still largely unknown. Understanding the impact of institutions on decentralization process of river basin management could be of important value for policy makers and water managers. This paper analyses the impact of institutional factors on river basin decentralization process and its performance. The paper uses an institutional economic framework, where institutional factors are broken down into contextual factors and initial conditions; characteristics of decentralization process; characteristics of central government/basin-level relationships and capacities; and internal configuration of basin level institutional arrangements. The impact of the institutional reforms on decentralization process and performance of river basin management is studied by accessing the level of decentralization of Limpopo (Mozambique), Inkomati (South Africa) and Mzingwane (Zimbabwe) river basins given the institutional factors in the respective countries. The study uses secondary data collected from different sources and primary data collected from a survey conducted in the three river basins in the studied countries. The analysis show mixed results. While the Inkomati river basin is more decentralized, the decentralization process of Mzingwane and Limpopo river basins is lagging behind. Institutional factors showed to be determinants in river basin decentralization process and its performance. The advancement of decentralization process and its performance in Inkomati river basin is associated with the endowment of financial capacity as