Creating and modifying institutions

Introduction

All environmental problems contain natural and human components. Addressing these problems will require working with ecological constraints, scientific knowledge and social structures. These can be viewed as the "rules" that are in practice in a particular situation. Rules in practice are institutions. When we address rules that govern environmental problems and what we need to do about them, we are either creating or modifying institutions.

In this section we will view institutions as a social construction that allows us to integrate both knowledge generating frameworks (such as the "systems" and "network" views presented earlier) and decision making frameworks (such as the "games" framework). In this view, the purpose of an institution is to serve as a vehicle to solve an environmental problem by bringing together appropriate information and decision making skills.

Environmental problems can be characterized by either their alignment between costs and benefits or by the complexity (Figure 1).

Figure 1. Types of environmental problems and decisions (adapted from Cunningham & Saigo 2001).

	alignment between costs and values
	good	poor
simple	EASY regulations	CPR community rules
complex	INFORMATION more research	WICKED political processes

This categorization of problems shows that not all problems can be solved by just getting more information or applying more regulations. In particular wicked problems require political involvement, community and consensus building processes that may take a long time and require substantial resources.

Of immediate interest is whether the problem is being solved to meet some external requirement or for the benefit of the members of the group. In small groups of people or groups of organizations, the formation and organization of these has been characterized as either "work groups" or "clubs" (Arrow et al. 2000). This distinction forms an important constraint on the ability to change the rules, to modify the institution itself, in response to the problem. Externally formed groups are more likely going to have to work within the institution, but these groups have the advantage that there are other values associated with maintaining the larger group that can be brought to bear on on the problem. On the other hand a self-contained club can change the rules but might not have any other social or economic capital to draw on.

Applying the framework

Applying the other frameworks entailed determining if certain "salient" features were in evidence. This framework starts from the results of applying some of these other frameworks. For example, you may have used a "systems" view to characterize limits and play out several example scenarios for the use of natural capital. Then you may have used a "games" view to compare two strategies and to assign outcomes values to the expected results from different conditions. Then the "institution" framework can be applied to examine the rules that are in use.

Example institutional solution for a CPR

It is important to establish that institutions, sets of rules, can resolve environmental and resource problems and, in particular, that CPR problems can and have been solved successfully without resorting to either overwhelming exogenous force (federal intervention) or privitization (turing a common resource into a private resource). The following simple example is one of many presented by Ostrom (1990) and illustrates the design principles that are characteristic of successful CPR institutions.

References

Arrow et al. 2000

Cunningham & Saigo 2001

Ostrom 1990