infonet-economy

The Institutional Resource Regime framework appears successful in comparing natural resource governance systems but unable to provide a common and persuasive explanation of the evolution of these systems. To fill this gap, the concepts of institutional complexity trap and transversal transaction costs (TTC) have been recently put forward. IRRs tend to fall into an institutional complexity trap which progressively reduces efficiency in regulating natural resource uses. These dynamics are the macro consequences of micro frictions in IRR extension, i.e. the transversal transaction costs. To date, the TTC concept has been mainly theoretical; the present paper examines its empirical relevance. We investigate dynamic causes of malfunctioning in poly centric systems focusing on interlinkages between extent and coherence. Materials come from case studies of urban water systems in Europe and Australasia. It allows us to propose a typology of TTCs and to highlight their impacts on the governance system. Finally, we are able to trace the pattern of evolution of an IRR in relation to the most likely institutional frictions occurrences. This has substantial policy implications, as we shed light on indirect but significant limitations to natural resource policy developments and adaptations.