Summary 

Many grand challenges of our time – climate change, environmental pollution, poverty, and natural resource scarcity – center around managing transnational common-pool resources, which include forests, oil pools, grasslands, fisheries, irrigation systems, and river basins. Our study, published in the Journal of Management Studies, reveals that two key governance mechanisms – international treaties and multi-stakeholder organizations, play a vital role in shaping cooperation and conflict between neighboring countries when sharing scarce common-pool resources across their national borders. 

The Urgency of Managing Freshwater Resources at International River Basins  

The World Resources Institute warns that 25 countries – home to one-quarter of the global population – currently face the dire prospect of running out of freshwater. A flashpoint is the world’s 310 international river basins, which account for roughly 60% of the global freshwater supply. The Nile River Basin alone borders on 11 African nations and over 300 million people depend on its waters. Allocating these resources and deciding about critical water infrastructure projects such as dam construction is a contentious issue fraught with competing interests and complex geopolitical dynamics between neighboring countries. 

What is Polycentric Governance and Why is it Needed? 

Unlike domestic water problems, which may be addressed by a single local or regional government within a country, there is no such centralized authority for the Nile and other river basins shared by multiple nations. In fact, highly centralized governance mechanisms with top-down decision-making are ill-equipped to handle the massive scale of ecological interdependencies and the fast pace of environmental crises. Instead, common-pool resources are managed more effectively when relevant stakeholders have a voice in resource accumulation, development, and allocation. This is the essence of polycentric governance, which Elinor Ostrom’s pioneering work defines as managing resources with multiple centers of decision-making that operate with some degree of autonomy at different levels (e.g., local, regional, state, national). 

What We Found: Governance that Enhances Cooperation and Constrains Conflict 

Our research examines polycentric water management systems composed of two governance mechanisms, international treaties and multistakeholder organizations. International treaties set the rules of the game for managing and using shared freshwater resources, thereby reducing uncertainty and facilitating collective action. Multi-stakeholder organizations complement treaties by serving as forums for politicians, administrators, citizens, and non-governmental organizations (NGOs) to discuss and resolve freshwater issues. We analyzed the international treaties and multi-stakeholder organizations associated with 1,283 events occurring at 122 international river basins around the world (1997-2007). We uncovered a superior governance configuration that simultaneously enhances cooperation and constrains conflict. 

This configuration combines: (1) treaties that clearly allocate property rights but leave procedural rules and uncertainty management less specified with (2) multi-stakeholder organizations that define processes for joint decision-making, information exchange, public participation, and dispute resolution. 

Implications: Too Much Specificity May Cause More Harm Than Good 

For Researchers 

Our study integrates ideas from political economy and management research to explain how two key governance mechanisms – international treaties and multi-stakeholder organizations – operating at different levels are interrelated. We show how different aspects of multi-stakeholder organizations appear to have potentially diverging effects on cooperation and conflict. While decision-making, information sharing, and public participation provisions enhance cooperation between countries, information sharing and dispute resolution mitigate conflict.  

We also identify the conditions under which these mechanisms may act as substitutes or complements for each other. Our findings indicate that leaving one less specified than the other actually improves, rather than harms, relationships between countries. 

For Practitioners and Policymakers 

As practical matter and policy concern, it is not possible to design agreements such as international treaties and multi-stakeholder organizations to foresee all of the issues that may arise. Our evidence suggests that being overly specific not only limits the ability to adapt in the face of unexpected circumstances, but that it is counterproductive and harmful for facilitating interactions between nations sharing common-pool resources. 

Beyond river basins, we advise governments and communities concerned about governing  transnational commons to: (1) prioritize the establishment of a clear and effective decision-making framework within these organizations to ensure robust governance provisions and 2) improve these entities’ coordination and adaptability by allocating resources and encouraging a learning culture. 

A Final Thought 

In the spirit of this Journal of Management Studies Special Issue on “Repurposing Management for the Public Good: Processes, Obstacles and Unintended Consequences,” we hope that our work will inspire future research seeking to improve managerial knowledge and practices for tackling grand challenges. It is imperative that we find solutions to these pressing problems. As marine biologist Sylvia Earl aptly summed up, “No water, no life. No blue, no green.”