All three countries experienced tensions between states and across levels of governance during droughts, illustrating the different coordination challenges caused by drought. State governments promote the interests of their constituents, defending water rights within their territory at the possible expense of regional and basin-wide interests. Water users petition their state or regional governments to defend their interests in interstate forums. For example, regional governments of Castilla-La Mancha and Murcia, the regions located at the two extremes of the Tagus-Segura aqueduct, voice concerns and interests from their water users when transferrable water volumes are being negotiated during droughts. Similar dynamics unfold in Australia with the states of New South Wales and South Australia defending their upstream and downstream interests during droughts, respectively. New Mexico shows the potential for a state to become internally divided because of interstate commitments. The 1938 Rio Grande Compact delivers water from New Mexico to Texas at Elephant Butte Reservoir in New Mexico, upstream of the Texas border; groundwater use by New Mexico farmers in this region has diminished the surface water deliveries from New Mexico to Texas. As a result, the New Mexico farmers between Elephant Butte Reservoir and the Texas border find themselves at odds with their own state government, which is bound by its legal obligations to pass water to Texas. This illustrates how coordination challenges also have a vertical dimension—that is, the coordination between state governments and national governments during droughts.