Water supply and the yield of government

From the London Review of Books, 17 August 2006, Volume 28, Number 17, "Why did they bomb the lighthouse?":

"Israel... gets 30 per cent of its water from the Golan Heights and 20 per cent from the West Bank."

How much economic analysis do governments use before deciding on the most intelligent way of securing 'key supplies'?

If a government claims that it can supply 'public goods' in a better way compared to the free market, what is the best of way of judging its performance? Should anarcho-capitalism be used as an analytical tool when judging the efficiency of governmental performance?