A water resource allocation problem in Western Skane, Sweden, is formulated as a two-level multiobjective program, which reflects a decentralized institutional framework of the region. The upper level model deals with the region as a whole and seeks for technically feasible alternatives and their associated costs. The lower level models are concerned with activities of different water users which often conflict each other. 

Both the upper and the lower level problems are solved in a stepwise manner using reference objective methods. Advantages of this class of multiobjective methods as a tool for aiding decision-making and conflict resolution are noted. Uses of the model and further extensions are also mentioned.