Abstract
This chapter provides the theoretical basis for the analysis of the institutional transformation of the environmental state. Governance as a concept of less-hierarchical rule which involves civil society and businesses is in conflict with the principles of the socialist state. To capture the evolution of governance, it is necessary to analyze the processes of gradual institutional change within the context of the political system which seek to enhance the capacity of the environmental state. Institutional reformers have also promoted the role of civil society and sought to make use of market-based governance approaches as part of the institutional reform process. Many of these reforms would not have happened without the crucial role of international organizations.
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