The basin scale has been promoted universally as the optimal management unit that allows for the internalization of all external effects caused by multiple water uses. However, the basin scale has been put forward largely on the basis of experience in temperate zones. Hence whether the basin scale is the best scale for management in other settings remains questionable. To address these questions this paper analyzes the economic viability and the political feasibility of alternative management options in the Kidron/Wadi Nar region. The Kidron/Wadi Nar is a small basin in which wastewater from eastern Jerusalem flows through the desert to the Dead Sea. Various options for managing these wastewater flows were analyzed ex ante on the basis of both a cost benefit and a multi-criteria analysis. The paper finds that due to economies of scale, a pure basin approach is not desirable from a physical and economic perspective. Furthermore, in terms of political feasibility, it seems that the option which prompts the fewest objections from influential stakeholder groups in the two entities under the current asymmetrical political setting is not a basin solution either, but a two plant solution based on an outsourcing arrangement. These findings imply that the river basin management approach can not be considered the best management approach for the arid transboundary case at hand, and hence is not unequivocally universally applicable.