Transaction Costs and the Perceived Effectiveness of Complex Institutional Systems

Abstract

Mark Lubell is professor of environmental science and policy at the University of California, Davis. His research focuses on cooperation and institutions in the context of environmental policy. He works on these issues mainly in the context of water management and agricultural decision making, using a mix of quantitative analysis, experiments, computational models, and qualitative approaches.Abstract: This article studies factors affecting how policy actors perceive the effectiveness of political institutions involved in complex water governance systems. The ecology of games framework argues that participants are more likely to perceive institutions as effective when the benefits of solving collective action problems outweigh the transaction costs of developing political contracts within these institutions. The authors hypothesize that transaction costs are a function of conflict, type of participation, political knowledge, scientific knowledge, and actor resources. Survey results suggest that the importance of these different sources of transaction costs varies across study sites in the Tampa Bay watershed in Florida, the Sacramento-San Joaquin River delta in California, and the Paraná River delta in Argentina. Based on the observed differences, some initial ideas are sketched about the evolution of complex governance systems from fairly simple and informal rules and networks to well-established tapestries of many formal institutions. Florida State University. He has published empirical analyses of regulatory and environmental agencies and laboratory studies of cooperative decisions to explore the responsiveness of agencies to changing political and policy environments and their ability to effectively enforce and implement policies.

The Impact of Forum Interdependence and Network Structure on Actor Performance in Complex Governance Systems

“…Our results demonstrate that understanding how actors perform in complex ecologies of games can be facilitated by a careful examination of the interconnectivity of forums in which they participate and the types of networks of exchange of information that they have. These findings build on recent work in the EGF demonstrating that forum interdependence can have a profound impact on policy‐making processes and influence dynamics within complex governance systems (Berardo & Lubell, ; Jasny & Lubell, ; Lubell, ; Lubell et al, ; Mewhirter et al, , ).…”

“…While forums allow actors to pursue their policy agendas, successful forum participation requires actors to invest significant time and effort (i) learning about the problems addressed in the forums, (ii) investigating and potentially aiding in the design of various policy alternatives, (iii) learning about the interests and policy views of other participants, (iv) negotiating with others to craft policy outputs, and (v) implementing and enforcing agreements (Mewhirter et al, ). Actors that face lower costs will be better able maximize their gains from participating in such forums (Lubell, Mewhirter, Berardo, & Scholz, ). The extent to which forum outputs align with an actor’s preferences serves as a good gauge for “actor performance” in the forum, with greater alignment indicating better performance…”

Institutional externalities and actor performance in polycentric governance systems

“…Scientific certainty captures the extent to which the respondent believes that there is adequate scientific knowledge regarding how policy decisions affect the environment across the governance system. As found in Lubell et al (), actors that perceive greater levels of scientific certainty tend to hold more favorable views regarding forum effectiveness. The variable is measured with responses to the following question: “In your opinion, how adequate is the currently‐available scientific knowledge to understand the future impacts of water policies in the region?” Values range from 0 to 10 where 0 = “not adequate” and 10 = “very adequate.”…”

“…Since Ostrom, Tiebout, and Warren () provided an initial examination of polycentric governance systems, social scientists have continued to study how the complexity of these systems, with their multiple policy stakeholders and problem‐related forums, affects how policy decisions are made in modern democracies. Research in a vast range of policy areas (from health, to environmental, to education and budgetary policies and beyond) has uncovered how polycentricity matters for decision‐making, particularly as policy stakeholders engage in “venue shopping,” spending resources selectively in certain forums to increase their political clout (Baumgartner & Jones, ; Guiraudon, ; Holyoke, Brown, & Henig, ; Littoz‐Monnet, ; Lubell, Henry, & McCoy, ), improve their knowledge about other actors' positions on a topic of interest (Lubell, Mewhirter, Berardo, & Scholz, ; Weible & Sabatier, ), and accrue technical expertise that can be used to successfully tackle a given problem (Meijerink, ; Pralle, ; Scholten, ).…”

Polycentricity and the Hollow State: Exploring Shared Personnel as a Source of Connectivity in Fragmented Urban Systems

“…The fundamental questions posed by scholars of polycentricity relate to the tensions and trade‐offs of fragmented regional governance systems on one hand and the collective action problems regional actors face on the other (Feiock, ; Lubell, ). Interorganizational networks ties are in reality comprised of interpersonal ties (or perhaps “intrapersonal” in our case), and so shared personnel perhaps represent a mechanism for reducing spillover effects (Lubell, Mewhirter, Berardo, & Scholz, ) and decision externalities (Feiock, ) that occur between policy forums. On the other hand, if what appears on the face to be a system of fragmented, independent organizations is in fact administered by a common set of actors, then perhaps polycentric systems are more at risk of group‐think and myopic policy responses than might be expected.…”