Watershed Partnerships and the Emergence of Collective Action Institutions

This paper examines the emergence of local cooperative institutions--watershed partnerships-that resolve collective action problems involved in the management of natural resources. The political contracting approach to institutional supply suggests that watershed partnerships are more likely to emerge when potential benefits outweigh the transaction costs of developing and maintaining new institutions. We analyze the impact of social, political, economic, and ecological features of watersheds that affect benefits and transaction costs on the emergence of 958 watershed partnerships in the more than 2,100 watersheds in the United States. Our findings demonstrate that watershed partnerships are most likely to emerge in watersheds confronting severe pollution problems associated with agricultural and urban runoff, with low levels of command-and-control enforcement, and containing the resources to offset transaction costs.