The contribution of soft institutional change to improve freshwater governance in the coastal zone will be examined. Freshwater management seeks to reduce losses due to overexploitation of the common-pool resources provided by river catchments and their associated ecosystems. Due to the complexity of the governance system, improving the performance of one coastal social-ecological system means searching for the appropriate “soft” institutional change. In the Pertuis Charentais region, increasing scarcity of freshwater in summer threatens the health of the coastal ecosystem and the sustainability of human activities, which depend on the use of natural resources. The allocation of freshwater among competing uses or concerns is a core issue for integrated coastal zone management. To address this issue, we have constructed an analytical framework that combines the ecosystem services approach with the institutional analysis of common-pool resources, and have developed an integrated simulation tool based on the system dynamic modeling approach. Freshwater scarcity generates three kinds of user conflict: (1) conflict between two extractive uses of freshwater (irrigation and drinking water), (2) conflicts between extractive uses (provisioning services) and other services (support, regulatory, and cultural) provided by freshwater, and (3) competition within a given activity sector (agriculture or shellfish farming). Participation by local managers led to the identification of realistic soft institutional changes that might mitigate conflicts and improve the governance system. These possible institutional changes were then integrated as fixed exogenous parameters in the simulation model. The simulated scenarios suggest that innovative collective arrangements involving farmers could be an alternative to other more restrictive top-down measures. This participatory experiment also illustrates the potential of social-ecological modeling for exploring acceptable new institutional arrangements.