The article explores why urban water entities are slow to adopt a pricing policy that could improve water management. The researchers developed a model based on political and transaction cost theories to predict pricing policy choices in the urban water industry. They identified seven key factors driving these decisions, including political cost sensitivity, economic wealth transfer implications, and users' ability to pay. The study aims to fill a gap in research on utility pricing policies and offers insights for governments, regulators, and water entity management to better understand the decision-making process in adopting user pays pricing formulas.