Abstract: The frequent occurrence of pollution disputes between inter provincial river basins reflects the long-standing game problem of "competition over cooperation" among local governments in river basin governance, and reflects the importance and urgency of strengthening collaborative governance to promote ecological environment protection in river basins. For this reason, China has implemented a major policy reform - Inter Provincial Watershed Ecological Compensation. Therefore, it is urgent to answer how the Inter Provincial Watershed Ecological Compensation achieves collaborative governance of watersheds and its policy effects. Inter Provincial Watershed Ecological Compensation was taken as a quasi experiment, and the logical approach to achieving coordinated watershed governance was explored. Based on balanced panel data from 30 provincial-level administrative regions in China from 2007 to 2020, the effect of inter provincial watershed ecological compensation were empirically examined using a multi period double difference method. The research results indicate that: (1) Inter Provincial Watershed Ecological Compensation can effectively balance the cost-benefit issues of different local governments in basin governance in the upstream, downstream, left and right banks, and are an effective strategic institutional arrangement for achieving coordinated basin governance. (2) The implementation of inter provincial watershed ecological compensation can significantly improve the resilience level of water ecology in the basin, and has become a new path for achieving mutual benefit and win-win in current basin collaborative governance. Based on research findings, corresponding policy recommendations are proposed from three aspects: constructing a comprehensive ecological compensation mechanism for the entire watershed in China, improving a market-oriented and diversified compensation system for the watershed, and improving the construction of a legal system for ecological compensation in the watershed.