Environmental Governance Dynamics: Some Micro Foundations of Macro Failures

Thomas Bolognesi and Stephane Nahrath

Ecological Economics, 2020, vol. 170, issue C

Abstract: This article proposes a new theoretical explanation to the question of environmental governance failures, combining micro and macro explanations in the long run. We put forward the concept of Transversal Transaction Costs (TTCs) as a critical source of governance failures. TTCs are transaction costs induced by interlinkages between public policies and property rights, an area under-investigated by the natural resources governance literature. We emphasise that TTCs are consequential in limiting the ability of environmental governance to coordinate natural resource uses. Drawing on institutional complementary and cluster literature, we argue that TTCs increased significantly over the years shaping governance evolution at the macro level in the long run. We show that institutional resource regimes tend to get locked into an Institutional Complexity Trap (ICT), which prevents improvement in coordination capacity and explains the persistence of environmental governance failures. Four cases substantiate our conceptual proposition of transversal transaction costs. In addition, the process-tracing of six water governance cases in Europe from 1750 to 2004 provides empirical support to the macro dynamics of institutional complexity trap.

Keywords: Governance; Institutional dynamic; Social-ecological system; Institutional resource regime; New institutional economics; Transaction costs; Institutional complexity trap (search for similar items in EconPapers)
JEL-codes: P47 P48 Q01 Q58 (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolec:v:170:y:2020:i:c:s0921800918311601

DOI: 10.1016/j.ecolecon.2019.106555

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