Maybe half the borders in the world are ridge lines (a natural watershed boundary), while the rest are bodies of water. That means that the consequences of what goes into that water are split between me and perhaps 20 other states/nations. That sort of cross-border negotiation has a lot more friction involved with it.
The watershed society would have jurisdictions nested around streams, tributaries, and rivers. I think if you sited your seats of power where your watershed meets the next higher jurisdiction, we probably would have a lot fewer industries running effluent pipes directly into our rivers, because the stuff the mayor is letting into their stream is running past the governor's house on its way to the president's.