Institutional Design Principles Research Articles

Social science knowledge and induced institutional innovation: an institutional design perspective

In this paper I advance a model in which institutional innovation is induced by changes in resource endowments, cultural endowments, and technical change. I also introduce the role of advances in social science knowledge as a source of institutional innovation. The sources of institutional innovation are illustrated by changes in land tenure and labor relations in Philippine agriculture, by the transition from command and control to market-based systems of resource management in the United States, and by the development of institutional design principles based on studies of small-scale resource management. In a final section, I elaborate a pattern model that maps the relationships among changes in resource endowments, cultural endowments, technology, and institutions.

Adaptive Capacity and Community-Based Natural Resource Management

Why do some community-based natural resource management strategies perform better than others? Commons theorists have approached this question by developing institutional design principles to address collective choice situations, while other analysts have critiqued the underlying assumptions of community-based resource management. However, efforts to enhance community-based natural resource management performance also require an analysis of exogenous and endogenous variables that influence how social actors not only act collectively but do so in ways that respond to changing circumstances, foster learning, and build capacity for management adaptation. Drawing on examples from northern Canada and Southeast Asia, this article examines the relationship among adaptive capacity, community-based resource management performance, and the socio-institutional determinants of collective action, such as technical, financial, and legal constraints, and complex issues of politics, scale, knowledge, community and culture. An emphasis on adaptive capacity responds to a conceptual weakness in community-based natural resource management and highlights an emerging research and policy discourse that builds upon static design principles and the contested concepts in current management practice.

Building deliberative public–private partnerships for waste management in Asia

Public–private partnerships in environmental policy should not simply be viewed in instrumental terms as means of providing environmental infrastructure and services, but also as sites where norms of environmental concern and political accountability are formulated and replicated. Deliberative public–private partnerships––or partnerships that allow greater public participation in the formulation of these norms––may therefore become an important new form of local environmental governance and help make partnerships more relevant to local environmental needs. This paper examines case studies of public–private partnerships in waste-to-energy projects in the Philippines and India to identify how principles of institutional design may enhance the deliberative nature of public–private partnerships in environmental policy. The paper argues that current approaches to deliberative, or cooperative environmental governance concerning public–private partnerships need to acknowledge insights from network theory concerning the communication of environmental and political norms before they can be successfully transferred to developing countries.

Financing the Provision of Global Public Goods

This paper examines the concept of global public goods (GPGs) and in that context explores the extent of aid (ODA) presently being diverted to GPG provision and whether such diversion skews aid‐flows towards some recipients. These are examined on the basis of OECD data for the late 1990s. The main argument of this paper is that ODA should not be used for financing GPG provision by developing countries. Instead, it is suggested that other sources of financing the provision of GPGs should be developed keeping in view the various technologies by which the GPGs can be produced and design principles for supra‐national institutions. Various arguments from Sandler, Barrett and Kanbur are considered. In particular, Kanbur's suggestion of two tensions involving the principles of economies of scale, subsidiarity, economies of scope and specialisation, is explored further.

The challenge of building successful stakeholder organizations: New Zealand's experience in developing a fisheries co-management regime

Abstract This article examines the development of a co-management approach in New Zealand where the government is devolving certain management responsibilities to Commercial Stakeholder Organizations (CSOs). In 1999 and 2001, a mail survey was used to gather data on the characteristics of CSOs, as well as the attitudes, and expectations of CSO leaders. Results are examined using Ostrom's design principles for long-lived institutions. The results suggest that CSOs are experiencing mixed success in developing institutions that will be resilient to long-term challenges. Successes are identified and recommendations for the further development of this management approach are offered.

Stretch and fit: on governance in technological regimes

Based on the concept of institutional design, this article explores a perspective on governance in technological regimes. This perspective complements the existing literature on management of change in technological regimes, which focuses on generating radical change or regime shifts. The institutional design approach is more incremental, as it is characterised by the simultaneous application of stretch and fit. On one hand, the existing regime should be stretched in order to change undesirable aspects. On the other hand, steering options should fit within other aspects of the regime. A case study of the diffusion of environmental technologies in the Dutch metal-plating industry is used to illustrate these two principles of institutional design. The article ends with the conclusion that the institutional design approach is a useful addition to the existing literature on managing technological regimes, although more research is needed into ways of extending its applicability to the physically embedded elements of technological regimes.

Regulation of Government: Has it Increased, is it Increasing, Should it be Diminished?

This article examines arms‐length ‘regulation’ of UK government – the public‐sector analogy to regulation of business firms — and assesses the precepts for public‐sector regulation embodied in the Blair Labour government’s official vision of public‐man‐agement reform, its Modernising Government White Paper of 1999. As a background to assessing the recipes for public‐sector regulation in Modernising Government, the article shows that such regulation grew markedly both in the two decades up to 1997 and in the plans and activities of the Blair government from 1997 to 1999. Against that background, the design principles for public‐sector regulation contained in Modernising Government are assessed. The White Paper was notable for embracing a doctrine of ‘enforced self‐regulation’ for the public sector that involved aspirations to both more and less public‐sector regulation in the future. It put its faith in a mixture of oversight and mutuality for ‘regulating regulation’. But in spite of the radical‐sounding tone of Modernising Government, the measures proposed appeared limited and half‐hearted, and two well‐known institutional design principles for regulation seemed to be missing altogether from the Blair government’s view of administrative ‘modernity’.

Understanding Institutional Designs within Marketing Value Systems

The authors show how institutional arrangements, which consist of contracting, ownership, and social elements, tie together the joint profits, or efficiency, of the marketing system. They use a criterion of remediable efficiency to develop a design framework for institutional arrangements and illustrate the process by designing a recycling system for newspapers. The authors close with an empirical research agenda and extract five institutional design principles for managers.

Expert thinking and environmental institutions

The paper explores environmental institutions that facilitate the trial and error search for sustainable development. The argumentation refers to four case studies of environmental management in the US, Europe, and China. To diagnose the institutional constraints of environmental management, the studies focus on the mental models with which experts understand environmental problems and justify their efforts to fix the problems. As such, the mental models also reflect the institutional rules that constrain expert actions. Design principles for novel environmental institutions are developed on the basis of institutional theory and case study findings. In conclusion, implications of the proposed institutional arrangements for the public role of experts are discussed.

Institutional Solutions for Governing the Global Commons: Design Factors and Effectiveness

Rather than relying on authoritative political structures to solve the dilemmas of governing the global commons, institutional perspectives show that governance can occur in situations where, at first glance, individual incentives for short-term economic gain seem to proscribe collective action. In this regard, a theoretical framework drawing on the study of common-pool resources explains effective institutional governance as the combination of internal design features and exogenous issue-area factors. This study raises the question of which institutional design principles provide for effective solutions for governing the commons. It does so in the context of international fisheries commissions. These institutions are often less than adequate conservers offish. Through an analysis of institutional goals and objectives, this study identifies some design features of fisheries institutions associated with this lack of conservation effectiveness, while at the same time identifying the institutional sources of the continuity afforded to participants by these enduring institutions.

Institutional foundations for a just society

The author distinguishes between fundamental justice and incremental justice and argues that the Harsanyian/Rawlsian, ex ante, concept of justice is the only concept of justice relevant to the design and evaluation of institutions. Unlike incremental justice for which a concensus as to what constitutes justice is generally not possible the conditions that satisfy the Harsanyian/Rawlsian concept of justice are derived from the assumptions of rationality and aversion to large risks, and the postulate of fairness. A concensus occurs not fortuitously but inevitably. The paper develops eight principles of institutional design that contribute towards a just society and that follow logically from these assumptions and postulates. The paper argues that these principles are by and large needed for social welfare maximization, so that justice is generally consistent with efficiency. The paper applies the theory to the concept of exploitation, crime and punishment, as well as labour market and social security, to illustrate the working of the principles developed.

Institutional design principles for accountability in large irrigation systems.

In Johnson, S. H.; Vermillion, D. L.; Sagardoy, J. A. (Eds.). Irrigation management transfer: selected papers from the International Conference on Irrigation Management Transfer, Wuhan, China, 20-24 September 1994. Rome, Italy: FAO

Technology Transfer: Fighting Climate Change and Pursuing Equity Through the Transfer of Energy Efficient and Renewable Energy Technologies

The present paper was prepared in the first half of 1991 in collaboration with three national sections of Friends of the Earth (Indonesia, Ghana and Canada). It was written by Craig Scott, with input and feedback from each section, and then edited by Robert Hornung. The purpose of the paper was to provide a discussion document of a “white paper” sort that could be used, as seen fit by Friends of the Earth and allied civil society organizations, in the advocacy efforts before, during and after either the official Earth Summit (of states) in Rio de Janeiro that led to various instruments including the 1992 Climate Change Convention – and/or used during the Alternative Earth Summit of transnational civil society actors that ran in parallel to the Earth Summit. The paper is being made available now, mostly as an exercise in historical documentation but also on the possibility that any of the reasoning and recommendations might yet have some relevance as the world, 30 years later (in the immediate lead-up to the last-chance Conference of the Parties in the United Kingdom in fall 2021), has failed to attend to the climate emergency that the report already took as its premise back in 1991. The paper’s title captures well the focus of the paper. It is an exercise in setting out key principles of institutional design in view of the competition between moral philosophies of global environmental justice and dominant economic theories and associated state policy. It begins with an overview of the history, as of 1991, of general transfer-of-technology (TOT) South/North dynamics and then situates debate surrounding transfer-of-environmental-technology (TOET) as it had developed up to and within the negotiations around the Climate Change Convention. It proceeds to discuss a trio of goals that must be achieved with any climate-related TOET regime and then fleshed out key principles applicable on four issues: decision-making power and control; sources of financing; nature of normative commitments; and shape and extent of intellectual property rights. The second half of the paper then presents and discusses four ideal-type models for a climate-change TOET mechanism or regime and concludes with an argument for a hybrid regime that has features of the first three models discussed. The reasoning surrounding the recommended regime may yet be relevant to some of the decisions to come at COP 2021.

Institutional design for monopoly regulation

Design of an institution to produce services under economies of scale and large sunk investments is considered, and monopoly market organization with private ownership is emphasized. The optimal design should use cost information beyond the institution's own experience as reference point, should induce welfare enhancing relative pricing, and should preserve investor risk bearing. The virtues of these principles of institutional design are shown, and circumstances where they are feasible are described. Problems winning agreement from all affected parties for such an arrangement are also noted.

An East Asian Model of Economic Development: Japan, Taiwan, and South Korea

The East Asian model of economic development focuses on 5 shared characteristics that seem significant in the contemporary economic development of Japan Taiwan and Korea. They are economic characteristics and include 1) high investment ratios 2) small public sectors 3) competitive labor markets 4) export expansion and 5) government intervention in the economy. Large and efficient investments in human capital and well-developed capacities to absorb new technology are 2 other economic features shared by The Three. One could add overcrowding (high man/land ratios) and scarcity of natural resources though these are handicaps rather than sources of economic strength. It is possible however that virtue springs from necessity and that ample arable land or abundant natural resources mainly permit governments to postpone the difficult decisions needed to promote development rather than provide the wherewithal needed to finance development. Other noneconomic characteristics of The Three such as ethnic and linguistic homogeneity relatively compact geography manageable population size and the Confucian tradition have not been considered in the model even though they have undoubtedly influenced labor productivity savings behavior and other aspects of economic performance. Whether the East Asian model ought to be followed depends on whether current and foreseeable circumstances are sufficiently like those faced by The Three to justify using the same policies that they used. Applicability of the East Asian model should also depend on whether the strategy employed by The Three has been responsible for their economic success. 2 aspects of the East Asian models policy features are noteworthy: 1) the policies typically work by influencing rather than replacing private market decisions and 2) the public expects government to intervene to influence economic growth.

Markets, Planning, and Socialism

It now seems accepted almost throughout the Left that socialist principles and the means to achieve them are in urgent need of fundamental rethinking; I hope that this contribution will be part of a much larger continuing debate. The breadth of debate needed is so vast (especially in view of recent political set-backs) that it is difficult to decide the most productive level at which to begin. Is the priority an abstract account of the possible economic organisation of some imagined future socialist society, or a detailed blueprint of the particular institutions to be introduced by a socialist government in Britain? In fact, there has already been much discussion of socialism at a very high level of abstraction, as well as detailed concrete proposals - for example, of the arrangements which would have been adopted by the British Labour Party had it been successful in the 1987 general election.1 What would seem more valuable, especially in view of the inability to secure for those plans adequate popular support, is to attack the middle ground between theory and detailed institutional implementation. Thus, the discussion in this article will concern that level where a broader socialist vision and its realisation in particular institutional forms intersect: what should be the principles of institutional design inspiring their practical construction? It is clear that it will be some time, at least in Britain, before concrete steps can be taken for the building of any kind of socialist economic arrangements; this at least provides an opportunity for an in-depth assessment of possible approaches to this task. A couple of matters must be quickly disposed of. The first is the meaning of socialism as used here. The argument to be made will explicitly reject any simple identification of socialism with nationalisation; nor will I accept as adequate vague incantations of social control of economic life or the replacement of markets with production for need. All these are elements in socialist thought, but have usually been employed as slogans which act as