Injecting gas can lead to a result called viscous fingering which is a non-continuous front of a fluid that can cause premature production of injected gas and missed sections of oil in the sweep. Fingering occurs because of the lower viscosity of gas compared to that of oil. The lower viscosity gas wants to flow faster than oil, so it channels through the oil.
http://rsta.royalsocietypublishing.org/content/372/2006/20120320
Injecting water alternately with gas combats this effect. Since water is more viscous than gas, fingering does not occur, therefore creating a solid front to ensure better production of oil. Ideally WAG looks like this:
http://www.lanl.gov/science-innovation/features/science-digests/optimizing-carbon-dioxide-sequestration.php
Another effect of WAG is that the injected water allows for better sweep of the lower section of the reservoir. Since gas is the lightest fluid in the reservoir, it rises to the top and water sinks to the bottom. So, miscible gas that is initially injected reaches the bottom of the reservoir but does not stay at that level, meaning that most of the oil produced is from the upper sections. Injecting water pushes the miscible gas/oil mixture to the well.
