Although the traditional approach in water resources management is to address water-related scarcity problems at the local or regional scale, some see water as a global resource with global drivers and impacts, supporting the argument for a global governance of water. If water is not appropriately priced, or if “poor water governance” creates adverse incentives for resource use in countries that export “virtual water,” then increased demand from the world market may lead to the overexploitation of water or increasing pollution. Is this reason enough for a global governance of regional water-scarcity problems? On which scale should water-management problems actually be addressed, and can global action compensate for local and regional governance failure? The paper argues that compensating globally for regional governance failure could cause “problems of fit” and present severe downside risks.