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Environmental and natural resources

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Chapter 28: Environmental and natural resource governance

Ralph Hamann, Jana Hönke, Tim O’Riordan

This is a pre-publication version. Please do not distribute. Cite as:

Hamann, R., Hoenke, J., and O’Riordan, T. (2018). Environmental and resources governance
in areas of limited statehood. In T. Risse, T.A. Börzel, and A. Draude (eds), Oxford Handbook
of Governance and Limited Statehood. Oxford.

Abstract
The environment and natural resources constitute a particularly urgent and complex
governance domain. A linear relationship is commonly assumed between statehood
and environmental performance, but this is not supported by the data, nor the
expansive literatures on other actors and modes of environmental governance, focused
on communities and social networks, on the one hand, and on markets and voluntary
action by market-based actors, on the other. ‘Hybrid’ or ‘mixed’ forms of governance
involving collaboration between state, business, and civil society actors have
emerged, but the effectiveness and legitimacy of such collaboration is likely
constrained in areas with very limited statehood. As statehood increases, prospects for
such mixed governance improve, though this depends inter alia on characteristics of
the state, such as its commitment to participatory and deliberative decision-making.
Overall, statehood clearly plays an important role in environmental governance and
its outcomes, but in a more multidimensional and often indirect way than commonly
assumed.

Keywords
Environment, natural resources, statehood, state, market, community, collaboration

1
Introduction

Environmental and natural resource governance refers to institutionalized modes of

social coordination to produce and implement collectively binding rules on natural

resource use and environmental impacts, and to secure and provide collective

environmental goods. Such governance structures and processes are meant to prevent,

mitigate, and respond to environmental problems at various scales, ranging from, say,

water pollution at the local level, to climate change at the global level. They also seek

to regulate people’s access to and use of renewable (e.g., forests, water) and non-

renewable (e.g., oil, minerals) resources. Broadly speaking, we are concerned with the

governance of people’s interactions with nature, though of course the definition of

nature is itself subject to such governance processes.

In this chapter, we focus on the role of limited statehood in environmental

governance. Our argument develops in five steps. First, we highlight the urgency and

inherent complexity of environmental issues as a governance domain, and this

requires that we give attention not only to environmental concerns in geographic

areas of limited statehood, but that we also recognise the environment as a functional

area of limited statehood. Second, we point to a common assumption that states play

an overriding role in assuring effective environmental governance, which suggests a

linear relationship between statehood and environmental quality. But the data show

that this relationship is not at all clear and there is significant variance in

environmental quality especially in areas with some intermediate level of statehood.

2
Third, we briefly outline expansive literatures on other actors and modes of

environmental governance, with a focus on communities and social networks, on the

one hand, and on markets and voluntary action by market-based actors, on the other.

Fourth, we describe the emergence of ‘hybrid’ or ‘mixed’ forms of governance

involving collaboration between state, business, and civil society actors. But the

effectiveness and legitimacy of such collaboration is likely constrained in areas with

very limited statehood. Fifth, we explain that, as statehood increases, prospects for

such mixed governance improve, though this depends inter alia on characteristics of

the state, such as its commitment to participatory and deliberative decision-making.

Overall, statehood clearly plays an important role in environmental governance and

its outcomes, but in a more multidimensional and often indirect way than commonly

assumed.

The urgency and complexity of environmental and natural resource governance

The origin of governance institutions has much to do with shaping people’s

interactions with their natural environment. Some early states collapsed because this

environmental governance failed to protect the natural resources, on which these early

societies depended (Diamond, 2005). Understanding environmental governance is

especially important in the current context of urgent local and global environmental

problems, such as air and water pollution, species and habitat loss, and climate

change, and the multiple interconnections between these environmental problems and

socio-economic inequality.

3
Since the environment became a prominent issue for the public and for policy-makers

(at least since the United Nations report ‘Our Common Future’ (World Commission

on Environment and Development, 1987)), there have been some effective

governance responses, such as water quality improvements in some European rivers,

or the relative success of the Montreal protocol to safeguard the atmospheric ozone

layer. But overall, accelerating pressures on the environment – both at local and

global levels – point to important limitations of current approaches. These governance

limitations are likely to become more acute, as scientists raise concerns of a ‘perfect

storm’ of converging, interacting social and ecological crises in the middle of this

century (Dearing et al., 2012), including increasingly critical challenges in feeding a

growing population (Godfray et al., 2010).

Steffen et al. (2015) explain that local or regional constraints to society’s extractive or

polluting impacts on the environment have been around at least since early industrial

societies, but ‘in addition we now face constraints at the planetary level where the

magnitude of the challenge is vastly different.’ Many now argue we have entered a

new geological epoch – the Anthropocene – in which humans have a decisive,

possibly destabilizing impact on the Earth System (Crutzen, 2002). Building on

Rockstrom et al. (2009), Steffen et al. (2015) consider nine ‘planetary boundaries’

that define a ‘safe operating space’ for humanity, beyond which the Earth System

may become too disrupted for societies to flourish: climate change; changes in

biosphere integrity (reduced biodiversity and species population sizes); stratospheric

ozone depletion; ocean acidification; biogeochemical flows (eutrophication due to too

much phosphorus and nitrogen); land-system change (especially deforestation);

freshwater use; and introduction of novel entities (new or modified substances or life-

4
forms that could have undesired effects). Of these nine boundaries, the first two –

climate change and biosphere integrity – have a special status because of their Earth

System-wide nature and their influence on all the other boundaries. Significantly, one

of these – biosphere integrity – has been impacted well beyond the safe operating

space (Steffen et al., 2015).

The scale and nature of challenges encountered in the Anthropocene require

corresponding governance responses: ‘Incremental change… is no longer sufficient to

bring about societal change at the level and with the speed needed to mitigate and

adapt to Earth system transformation’ (Biermann et al., 2012: 1306). These calls are

motivated by states’ failure to effectively create international regimes that address

trans-boundary environmental problems, foremost among which is climate change

(Mitchell, 2003). Indeed, global environmental governance has been characterized by

a proliferation of actors, beyond nation states, and mechanisms, beyond state treaties,

as well as an increasing fragmentation ‘across levels and functional spheres’

(Biermann and Pattberg, 2008: 277). This proliferation and fragmentation – despite

some signs of consolidation in recent decades (Kim, 2013) – has allowed for more

context-specific responses, but critics point to a lack of coherence and accountability.

The plethora of ‘new’ and ‘polycentric’ (e.g., Jordan et al., 2015) or ‘hybrid’ (e.g.,

Lemos & Agrawal, 2006) forms of environmental governance has emerged in the

wake of the overt challenges faced by states in responding effectively to the

complexity of local and global environmental challenges. This complexity is brought

about by the multitude of feedback interactions, at varying scales, between diverse

components of social-ecological systems (Folke, Hahn, Olsson & Norberg, 2005;

5
Holling, 2001; Ostrom, 2009). These interactions between diverse components and

levels mean that cause and effect relationships cut across different spatial and

temporal scales, with important implications for governance. Spatially, environmental

challenges cut across government jurisdictions, as illustrated by transboundary water

catchments, acid rain, or climate change. Temporally, the feedback interactions give

rise to non-linear dynamics, which in turn create surprises and thresholds, beyond

which social-ecological systems may ‘shift’ into a different state with potentially

detrimental consequences for social and natural systems (Lade, Tavoni, Levin &

Schlüter, 2013; Liu et al., 2007).

Relatedly, defining clear boundaries of environmental and resource governance is

difficult. The definition of ‘nature’ and of ‘the environment’ is itself subject to

governance processes and political contestation. To illustrate, uncertainties

surrounding the meaning of ‘environment’ were a prominent feature of parliamentary

discussions leading up to the National Environmental Act of 1998 in South Africa

(Hamann, Booth & O’Riordan, 2000). Specifically, it was unclear to the lawmakers to

what extent the law should attempt to cover problems such as indoor air pollution.

This illustrates how the ‘environment’ and ‘environmental problems’ are context-

dependent. Indoor air pollution is not a prominent environmental concern – for the

public or for lawmakers – in most developed economy contexts, but it is a crucial

environmental health issue in many developing economy countries, where many

people rely on indoor wood or coal fires as a source of heat and light (Bruce, Perez-

Padilla & Albalak, 2000).

6
These complexities and blurred boundaries mean that effective and legitimate

environmental governance is not only a particularly significant challenge in

geographic areas of limited statehood. It is also an important challenge for more

consolidated states. This is also because many of our most pressing global

environmental problems – climate change, in particular – have been caused by

production and consumption systems in rich countries with consolidated states, even

though the most serious negative impacts will be borne by poor communities in

geographic areas of limited statehood. Consolidated states thus face a moral and legal

duty to lead in developing and implementing effective responses.

That said, areas of limited statehood clearly face pressing environmental challenges of

their own. These are arguably most severe in areas of armed conflict. Many of the

highly biodiverse forests in central Africa, for instance, have experienced repeated

episodes of violent conflict, and indeed this correspondence is replicated in other parts

of the world (Hanson et al., 2009). The environment suffers directly from violent

conflict: for instance, it is estimated that 50% of Vietnam’s coastal mangroves were

destroyed by Agent Orange and other herbicides in the Vietnam War. Indirect impacts

are often even more significant, as violent conflict erodes government budgets and

administrative protection of the environment, and as armed groups exploit natural

resources for sustenance or income (Hanson et al., 2009). Similarly, organized crime

creates vital challenges to maintaining environmental quality. The extent to which

organized criminal networks facilitate the illegal trade in wildlife, such as rhino horn,

is often under-estimated, and this has significant impacts on biodiversity, as well as

the spread of invasive species and disease (Rosen & Smith, 2010). Wildlife crime is

being addressed in national and international law, but its enforcement is still weak,

7
even in countries with consolidated states, but more so in areas of limited statehood

(Wellsmith, 2011).

In combination, these complexities and challenges create jurisdictional, knowledge,

and political problems for governance: Even if willing to protect the environment,

governance actors often have influence only on a part of the broader social-ecological

system; they often struggle to predict changes in such systems, including the

outcomes of their own actions; and they struggle to bring about behavioural changes,

often because those creating environmental problems are often not those who will

suffer the consequences. These problems have implications for who governs and how,

as we will discuss later. But first we will give attention to the often-assumed

relationship between statehood and environmental performance.

The relationship between environmental governance and statehood

In some of the scholarly literature and in much of the practitioner literature on

environmental governance, there is an assumption that states play a central role in

assuring environmental quality. For instance, despite their critique of the limited

effectiveness of past state-led efforts, the prescriptions offered by Biermann et al.

(2012) focus largely on things that states should do in their national jurisdictions or in

the United Nations system. A corresponding assumption is that statehood – the

capacity and willingness of states to enforce centrally defined rules and to provide

public goods – is a prerequisite for effective and legitimate environmental

governance. The United Nations Environment Program thus devotes much of its

‘environmental governance’ effort on ‘enhancing the capacities of countries to

8
establish and enforce legal and institutional frameworks to address environmental

priorities’ (UNEP, 2015: 30).

This linear relationship between statehood and environmental quality is made overt by

Hsu and colleagues (2016) in their discussion of their Environmental Performance

Index (EPI). This assesses countries’ performance in terms of ecosystem vitality and

environmental health, comparing actual performance against policy goals or

established scientific thresholds. For our purposes, the inter-country comparison in

EPI scores is particularly salient. The Nordic countries perform best: ‘Finland has

taken the top spot, followed by Iceland, Sweden, and Denmark’ (Hsu et al., 2016: 11).

The worst performers are similarly predictable, according to the authors:

‘The 2016 EPI’s poor performers are a familiar group to the Index’s low end.

Somalia again takes last place (180th) followed, in ascending order, by

Eritrea, Madagascar, Niger, and Afghanistan. These African and South Asia

nations all have broad governance problems with long, troubled legacies. The

Index’s bottom third, comprised mostly of African countries with a smattering

of South and East Asian nations, is a list of troubled states whose problems

extend beyond their inability to sustain environmental and human health.

These nations show that environmental performance is an issue of governance

– only well-functioning governments are able to manage the environment for

the benefit of all’ (Hsu et al., 2016: 11).

‘Well-functioning governments’ are hence identified as sine qua non for effective

environmental governance. There are longstanding traditions in the literature that

9
would contest this argument, as outlined below. In addition, we illustrate the tenuous

relationship between statehood and environmental performance in Figure 1. It plots

countries in terms of their level of statehood on the x-axis and their score in the EPI

on the y-axis, using data compiled by Stollenwerk and Opper (2017). It shows that

even though there are no countries with very low levels of statehood and high

environmental performance, overall, statehood and environmental performance are

not closely correlated. Countries with similar levels of statehood, such as Belarus and

Mozambique, have very different levels of environmental performance, while

countries with very different levels of statehood, such as Cote d’Ivoire and Malawi,

have similar levels of environmental performance.

------ Figure 1 somewhere here -----

Figure 1 thus suggests that statehood on its own is not a good predictor of

environmental performance. There are four possible reasons for the scattered nature

of the scatter plot in Figure 1. The first is that there is, in fact, a stronger correlation

than what the graph depicts, and the failure to represent this is due to measurement

problems. Such measurement issues are considered in more detail in the chapter by

Stollenberg and colleagues in this volume, but we think they are unlikely to be the

sole cause of the lacking correlation, given the empirical literature that also describes

and explains such variance, as discussed below. A second and related possible

argument is that the measures used for statehood by Stollenwerk and Opper (2017)

focus largely on states’ capacity to enforce rules and provide public goods, but do not

sufficiently consider their willingness to do so. This is significant because

commitments to and investments in environmental performance may involve trade-

10
offs with other policy objectives, such as economic growth and job creation. To some

extent, such differences in states’ inclinations would be accounted for in the EPI’s

‘proximity-to-target’ methodology, because it considers performance relative to

policy goals that reflect states’ preferences.

A third response may be that there are geographic differences in the severity or

complexity of environmental challenges. One such geographic difference that has

been given much attention in the literature is resource abundance, which can influence

the incentives of ruling and aspirant elites in various unhelpful ways (see Le Billon,

2012; Snyder and Bhavnani, 2005). Abundant natural resources thus present polities

with significant challenges in the process of establishing effective and legitimate

institutions (Acemoglu & Robinson, 2012), which in turn creates difficulties in

managing these resources, giving rise to a cyclical dynamic of the ‘resource curse.’

However, cases such as Botswana or Norway suggest that this is not a necessary

dynamic (see also Cramer, 2002; Nest, 2011; Laudati, 2013).

These three factors that possibly confound a simple linear relationship between

statehood and environmental performance ought not to be discarded, but we will give

special attention to a fourth one: An important explanation for the variance in

environmental performance relative to statehood is that states are not the only, or

necessarily the main, governance actor when it comes to environmental and natural

resource governance. Other actors and dynamics are also at play. Scholars of

environmental governance hence give attention to a broader array of actors and their

inter-relationships (Lemos and Agrawal, 2006).

11
Actors and modes (1): From states to communities

In their review of the environmental governance literature, Lemos and Agrawal

(2006) identify different streams that emphasize different actors as particularly

important and effective. The predominant approach for much of the 20th Century has

been to emphasize the need for the state to centrally and hierarchically regulate

problems such as overfishing and soil degradation. A prominent proponent is Hardin

(1968), who argued that users of an environmental commons face rational incentives

to exploit it beyond its ability to recuperate (thus resulting in the ‘tragedy of the

commons’), unless some centralized authority prevents them from doing so. He noted,

‘The social arrangements that produce responsibility are arrangements that create

coercion, of some sort’ (Hardin, 1968: 1247), and in particular he advocated coercive

constraints on the ‘commons in breeding’ (op cit.: 1248).

Interconnected trends and characteristics of environmental governance have eroded

this faith in centralized authority structures. For a start, the complexity and cross-scale

nature of environmental problems – described above – have resulted in severe

constraints to an effective response by states. These constraints have been connected

to and exacerbated by other challenges faced by states in managing the economic and

social disruptions of globalization (Lemos and Agrawal, 2006).

There have been, broadly speaking, two overarching alternatives offered to nation

state coercion as the primary means to govern the environment. One emphasizes the

role of local communities and networks self-organizing to address the ‘tragedy of the

commons.’ Ostrom (2009: 420) notes, ‘Extensive empirical studies by scholars in

12
diverse disciplines have found that the users of many (but not all) resources have

invested in designing and implementing costly governance systems to increase the

likelihood of sustaining them.’ To understand whether the benefits of such self-

organization outweigh the costs, Ostrom considers key sub-systems and their

interactions in complex social-ecological systems: ‘In a complex social-ecological

system, subsystems such as a resource system (e.g., a coastal fishery), resource units

(lobsters), users (fishers), and governance systems (organizations and rules that

govern fishing on that coast) are relatively separable but interact to produce outcomes

at the social-ecological system level, which in turn feed back to affect these

subsystems and their components, as well other larger or smaller social-ecological

systems’ (Ostrom, 2009: 419).

Variables related to each of these four subsystems influence whether collective self-

organization is likely to occur. For instance, the resource system ought not to be too

large, and should be sufficiently predictable, for self-organization to occur. Similarly,

beneficial collective action is more likely if leadership skills and social capital exist

among users. Within the governance subsystem, Ostrom (2009: 421) highlights

‘collective choice rules:’ ‘When users, such as the Seri fishers in Mexico and forest

user groups in Nepal, have full autonomy at the collective-choice level to craft and

enforce some of their own rules, they face lower transaction costs as well as lower

costs in defending a resource against invasion by others.’ One might imagine different

scenarios, in which such local autonomy exists. One is the relative absence of a

central state, which might impinge on local autonomy. Yet the second requirement –

freedom from ‘invasion by others’ – would also need to be provided somehow. Thus,

for local autonomy for collective self-organization to be provided not just to powerful

13
user groups, it is likely that this requires a state that is willing and strong enough to

prevent ‘invasion by others,’ yet simultaneously allows and supports decentralized

authority. This also suggests that statehood – that is, the ability to enforce centralized

decisions – is not the only state characteristic that is important in environmental

governance: So is the state’s willingness and ability to support and enshrine local,

autonomous decision-making.

Actors and modes: Markets and voluntary action by market actors

If self-organizing among users and local communities is one response to a declining

faith in the state as primary custodian of environmental governance, the second

response is an emphasis on economic exchange among market participants. This is

premised on the diagnosis, following Pigou (1920) and Coase (1960), of

environmental problems as externalities, or social costs that are not included in

market transactions. Relatedly, Stern (2008) has referred to climate change as the

‘greatest market failure ever seen.’ The response is thus to price these externalities

and to ‘internalize’ them in market actors’ incentive structures. This may be done by

imposing a tax or by allocating property rights – both approaches are prominent, for

instance, in climate change mitigation in the form of carbon taxes and tradable carbon

credits. It is apparent that, while such measures do not involve state coercion in the

form of ‘command and control’ regulations, they do rely on state coercion in the

creation and enforcement of market rules. This is obviously the case with

environmental taxes. It is also the case in some, but not all, markets for environmental

goods or ‘bads,’ such as ecosystem services or carbon emissions.

14
Beyond these economists’ prescriptions, the broader trend towards a market-based

approach to environmental governance highlights the incentives and roles of market

actors, that is, businesses and consumers. An underlying premise is that the market

allows for greater efficiency, context-responsiveness, and innovation than state rules

and their enforcement. Some prominent initiatives in this domain focus on market

actors voluntarily agreeing to rules and governance structures in the management of

commodities, such as wood and pulp, fish, or palm oil. This may connect to

certification schemes, such as those of the Forestry Stewardship Council or the

Marine Stewardship Council, and eco-labelling initiatives to enrol consumers, whose

choices may be influenced by environmental concerns and some of whom may pay a

premium for environmentally conscious production. Other voluntary initiatives focus

on influencing behaviour at the level of the firm, such as the ISO14001 standard on

environmental management systems (Potoski & Prakash, 2005). Like other

management systems, its objective is not to achieve a certain level of performance,

but to foster continuous improvement. Given the possibility of competitiveness gains

associated with enhanced energy and resource efficiencies (Porter and Van der Linde,

1995), this could motivate significant ‘ecological modernization’ pressures on

managers and corresponding environmental improvements (Mol, 2001).

There are thus five kinds of explanations for why market actors engage in voluntary

action, and each is associated with possible concerns and criticisms. Three of them

have been prominent in the management literature, as delineated by Bansal and Roth

(2000). They empirically develop three overarching motivations for firms’ ecological

responsiveness: environmental responsibility, competiveness, and legitimation. Their

first category, environmental responsibility, is based on their finding that ‘[f]irms

15
acted out of a sense of obligation, responsibility, or philanthropy rather than out of

self-interest’ (p. 728). They argue that this driver gives rise to initiatives including

donations to environmental causes, unpublicized initiatives, and life cycle analysis.

Environmental responsibility is associated directly with managers’ attitudes, which in

turn are likely to be influenced by managers’ prior education and ethical orientation,

as well as the firm’s organizational culture (Marshall et al., 2010).

Environmentally responsive firms devote time and resources to developing a

‘corporate environmental ethic’ (Henriques & Sadorsky, 1999, p. 97), with

empirical support from the U.S. metal-finishing industry (Flannery & May,

2000) and the Canadian oil and gas industry (Sharma, 2000). Given that owner-

managers have significant influence over strategy and operations in small and

medium enterprises, managers’ attitudes and sense of responsibility are likely to be

especially salient in smaller firms (Marshall et al., 2010; Hamann et al., 2017).

However, overall, it seems unlikely that managers’ sense of responsibility may be

relied upon, by itself, given the many documented instances of corporate

environmental irresponsibility.

Bansal and Roth’s (2000) second category is competiveness, which relates to ‘the

potential for ecological responsiveness to improve long-term profitability’ (p. 724).

They make reference in this regard to the resource-based view of the firm (Barney,

1991) and in particular Hart’s (1995) natural resource-based view of the firm (see also

Hart & Dowell, 2011). In this vein, Porter (1980, 1996), Porter and van der Linde

(1995), and Hart (1995) emphasize in particular the opportunities for product

16
differentiation and thus enhanced market share, as well as cost efficiencies related to

reduced expenditures on energy and material inputs and waste disposal.

The role of market-related motivations has also been highlighted by political scientists

focused on the role of limited statehood: Firms thus engage in voluntary action

despite the absence of state coercion to enhance efficiencies of production, expand

their access to consumers, keep out competitors, and enhance their reputation (Börzel

and Thauer, 2013; Thauer, 2014). Correspondingly, the criticism is that this

motivation can only be relied upon if indeed such competitiveness motives trump the

significant incentives faced by managers to externalize environmental costs. This may

also lead to very partial responses or free-riding by industry, when companies

prioritize – and publicize – those actions that have economic benefits, but neglect

those that involve a cost (Delmas and Keller, 2005). Relatedly, voluntary programs

have been criticized as ‘greenwashing,’ or as relatively superficial efforts motivated

by public relations (Laufer, 2003).

The third explanation offered by Bansal and Roth is that firms respond to legitimation

needs arising from their institutional environment (Scott, 1995). That is, firms face

significant drivers for environmental responsiveness not just due to the growing array

of government laws and regulations in areas such as water and air pollution, but also

due to an increasing array of private regulation, such as rules and guidelines specified

by retailers or by industry associations, as well as increasingly widespread social

norms (Dashwood, 2012). A broad array of private regulation initiatives have

emerged, with different thematic emphases and enforcement mechanisms. Arguably

one of the most effective mechanisms is for large customers to impose standards on

suppliers, such as the institutionalized expectations that large retailers enforce on their

17
suppliers through GlobalGap. Firms thus comply with such standards to ensure

continued access to markets. Even if such market-based expectations are not explicit,

adoption of environmental standards, such as the ISO14001 environmental

management standard, may be seen as a signal to other market actors that confers

competitive advantage (Potoski & Prakash, 2005). The boundaries between

legitimation and competitiveness are thus fluid.

Not surprisingly, the institutional interpretation has been prominent among political

scientists, including two significant variants. Market actors may engage in voluntary

action in the absence of state coercion because they want to pre-empt such coercive

regulation. That is, they respond to the ‘shadow of law’ (Lemos and Agrawal, 2006:

306) or the ‘shadow of hierarchy’ (Mayntz and Scharpf, 1995; Börzel and Risse,

2010; Börzel and Hamann, 2013; Hönke and Kranz 2013), if there is a credible threat

by the state to regulate environmental performance or standards. However, due to the

high task complexity involved in many environmental issues, it likely varies whether

such a credible threat exists. Moreover, in areas of limited statehood, the credibility of

such threats is constrained by the lacking ability or willingness of the state to enforce

its decisions. Finally, even if the ‘shadow of hierarchy’ exists and motivates voluntary

action by private actors, there is still a strong incentive for many companies to free-

ride or engage in merely symbolic actions, or ‘greenwashing.’

Finally, political scientists have argued that voluntary action may be motivated by the

‘shadow of anarchy’ (Mayntz and Scharpf, 1995; Börzel and Risse, 2010; Börzel and

Hamann, 2013) brought about by the lack of any coordination. That is, private actors

may be motivated by the realization that a lack of effective governance will lead to a

18
decline in the natural resource base, on which economic activity depends. For

instance, in South Africa the retailer Woolworths engages in far-reaching efforts to

support farmers in adopting more environmentally friendly farming practices. Its

primary motivation was the recognition that its own long-term success as a leading

seller of fresh produce depended on South African farmers’ long-term ability to

provide such produce. Implicit in this was the realization that the South African

state’s extension services were unable to provide this kind of support (see Methner,

2013). This motivation premised on securing the natural resource base, as well as the

self-organizing mechanisms adopted, bring this kind of initiative into the domain of

self-organizing practices highlighted by Ostrom (2009), except that the actors’

interactions are premised on market exchanges, rather than community-based rules

and social capital. As noted above, however, it is unclear how such self-organizing

efforts will be dominated by powerful actors. This concern is arguably particularly

prescient in the interactions between market actors, given the significant power

differential between, say, a large retailer and family farms.

Mixed actor constellations, cooperation, and the role of limited statehood

Beyond either state authority, market incentives, or community self-organizing,

environmental governance is also characterized by the dynamic evolution of diverse

forms of ‘mixed governance’ that involve some combination of state, market, or

community (represented by the triangle in Figure 2). Examples of such forms abound

and include the Extractive Industries Transparency Initiative, the Forestry

19
Stewardship Council, and the Marine Stewardship Council, all of which represent

global initiatives that combine governments, businesses, and NGOs. Such

environmental partnerships are also prominent at the local level, including for

instance catchment management arrangements, urban environmental initiatives, or

biodiversity programmes. Lemos and Agrawal (2006) argue that ‘[t]he emergence of

these hybrid forms of environmental governance is based upon the recognition that no

single agent possesses the capabilities to address the multiple facets,

interdependencies, and scales of environmental problems that may appear at first

blush to be quite simple… They seek simultaneously to address the weaknesses of a

particular social agent and to build upon the strength of the other partner’ (op cit.:

311). In such arrangements, addressing market actors’ incentives is meant to foster

efficiency and innovation; including community perspectives should enhance access

to local information and legitimacy; and the state ought to provide for enforcement

authority, where necessary, and an ability to create coherence, at least within national

jurisdictions.

-------- Figure 2 here --------

Yet ‘hybrid’ (Lemos and Agrawal, 2006), ‘polycentric’ (Jordan et al., 2015), or

‘multilevel’ (Betsill and Bulkeley, 2006; Duit et al., 2010) environmental governance

generally still involves the nation state in some way or other, either directly, in some

form of collaborative arrangement, or indirectly, as a ‘shadow of hierarchy.’ It is thus

notable that much of the environmental governance literature pays relatively little

attention to statehood, or the capacity of the state to fulfil its Westphalian mandate. It

often features in rather general terms as part of a critique of hybrid governance: ‘In a

20
world of weak states, deterritorialized action, and concentrated power, corporate

interests and multilateral organizations can control and reframe environmental action

as a means to legitimize their model of development’ (Lemos and Agrawal, 2006:

313). Yet some states are clearly ‘weaker’ than others and there are diverse kinds of

constraints faced by states in different contexts. Based on our discussion above,

different levels of statehood will likely impact on why and how other actors become

involved in governance, and on the corresponding effectiveness of resulting

governance arrangements.

A key factor in whether and how mixed environmental governance arrangements arise

is the incentives for state and non-state actors to cooperate. Based on Börzel and Risse

(2010), Figure 3 suggests that these cooperation incentives vary depending on

statehood levels. States with very low capacity are likely to be less inclined to

cooperate with non-state actors because they fear a loss of autonomy, as basic rules

governing the cooperation may not be enforced. Highly capacitated states, on the

other hand, have little incentive to cooperate because they are ostensibly in a position

to provide governance by themselves and are unlikely to want to share authority.

According to this argument, there is thus some ‘middle level’ of state capacity that is

most likely to give rise to a government incentive to cooperate with non-state actors.

This results in the inverted ‘U’ curve (a) representing government incentives to

engage in partnerships.

------- Figure 3 here -------

21
Meanwhile, Börzel and Risse (2010) argue that non-state actors are more incentivized

to cooperate with the state as the state’s ability to exert a ‘shadow of hierarchy’

grows, because they seek to avoid hierarchical mandates in favour of negotiated

agreements. However, we have empirical evidence that suggests non-state actors, and

businesses in particular, are at least trying to collaborate with the state even in areas

of very limited statehood, such as in the Democratic Republic of Congo (Kolk and

Lenfant, 2012). They may do this because they fear the ‘shadow of anarchy’ and a

loss of collective environmental goods, on which they depend. Alternatively, they

may be motivated by the influence of distant actors, such as investors or NGOs,

which exert pressure on companies to engage in corporate social responsibility and

associated partnerships (Seitanidi and Crane, 2009; Kolk et al., 2008). As a result,

non-state actors’ cooperation incentives are likely high when the state is strong, due to

the ‘shadow of hierarchy,’ and some incentives also exist when the state is weak,

resulting in the asymmetric ‘U’ shaped curve (b).

The implication is that there is some intermediate level of statehood, when both the

state and non-state actors have some incentives to cooperate, and where the state has

at least some capacity to effectively engage in such cooperation. This is supported by

case studies of collaboration initiatives involving state and non-state actors

established to enhance urban environmental management and related objectives in

South Africa (Hamann, 2014). In one of them, the municipal government was clearly

challenged to fulfil these management objectives, which motivated businesses and

NGOs to become involved in a collaborative venture. Yet the municipality was strong

and capable enough to proactively participate in the partnership and to fulfil agreed

responsibilities. In another case, the municipality also struggled to address

22
environmental management and other needs, but its capacity was so limited that

effective cooperation was thwarted. Significantly, state capacity played a role not only

in hybrid governance arrangements involving the state: In another case study, a

business-NGO partnership was crucially constrained by the lack of clear and well-

enforced state regulations.

The conclusion from this is that statehood matters for mixed and collaborative forms

of environmental governance. In particular, prospects for effective environmental

governance – state-led or mixed – are likely to be dim when statehood is very

limited. This is also supported by the comparison between environmental

performance and statehood in Figure 1. On the left of the figure, where states are very

constrained, most countries show very low levels of environmental performance. It is

possible that in some instances in very weak states, local communities can self-

organize to protect local natural systems, or corporate actors may be incentivized by

market incentives or normative pressure from distant actors, such as NGOs, to uphold

high environmental standards (Börzel and Thauer 2013; Prakash and Potoski 2006;

Smith 2008; Spar and La Mure 2003). For instance, motivated by the high-profile

human rights scandal that embroiled an AngloGold Ashanti exploration site in the

Ituri District in the DRC, the company engaged in a far-reaching effort to support a

local decision-making forum involving a range of local stakeholders (Hamann,

Kapelus, and O'Keefe, 2011). But these are likely exceptions. Without an effective

state or some functional equivalent, chances are high that local communities

managing natural resources successfully will be vulnerable to ‘invasion from others’

(Ostrom, 2009: 421), be it corporations, predatory elites or others. Corporations’ self-

23
regulating efforts are either absent, patchy, or largely symbolic, especially if any

serious effort would involve significant costs.

Relatedly, despite the possible positive effects of more dispersed coordinating agency

in ‘polycentric’ governance arrangements, recent studies emphasise that there remains

an important role for the state in ensuring the legitimacy and effectiveness even of

such dispersed governance arrangements (Pahl-Wostl & Knieper, 2014). Ongolo

(2015) provides a similar critique of the fragmentary nature of polycentric

governance, especially in areas of limited statehood.

Explaining diverse environmental performance outcomes for intermediate levels

of statehood

So, when statehood is very limited, neither state-driven, nor mixed and collaborative

forms of governance are likely to be consistently effective in ensuring environmental

quality. This is shown on the left side of Figure 1. However, as noted, the relationship

between statehood and environmental performance is much less clear as statehood

improves. What explains this diversity?

For a start, the high task complexity associated with many environmental problems

pre-empts a traditional, state-centric and ‘command-and-control’ approach to

governance. Therefore ‘new,’ ‘hybrid’ and collaborative environmental governance

forms have emerged. We have argued in the previous section that the success of such

collaborative governance forms is likely patchy especially in areas of very limited

statehood (i.e., on the left of Figure 1). As statehood increases, however, prospects for

24
such collaborative arrangements improve as both the incentives and abilities of

collaborating partners increase.

As noted, Ostrom (2009) and others have identified a range of factors that likely

influence the success of community-based natural resource management efforts, and

these will also shape the form and outcomes of collaborative arrangements. Some of

these factors, such as the size of the resource management system, are related to

geographical factors. Others are more directly related to institutional conditions,

including in particular the existence of leadership skills, social capital, and ‘collective

choice rules’ that give some autonomy to local actors. We would thus expect that, in

countries with intermediate levels of statehood, those with higher levels of social

capital and more accessible education systems will have higher environmental quality.

However, research has shown that ‘more social capital’ is too coarse an analysis: the

type and form of social networks likely play an important role Bodin & Crona, 2009).

For instance, the number of ties that actors have to others is significant and more of

such ties may not be useful, beyond a certain point: ‘if only few ties exist among

actors, joint action is hard to achieve, but too many ties can foster actor

homogenization and reduce the capacity for effective collective action to deal with

changing conditions’ (op cit.: 372).

Similarly, our previous discussion suggests some diversity in the extent to which

market actors become environmentally responsible. Some argue that private actors

will be inherently untrustworthy as environmental governance agents (Peet, Robbins,

& Watts, 2010). Even if we countenance a possibly positive role, there are likely a

range of contingent factors. In particular, companies are more likely to experience

25
functional equivalents to the ‘shadow of hierarchy’ in the form of pressure from

consumers, investors, or NGOs, if they are customer facing or listed on a stock

exchange with demanding transparency rules (Börzel and Hamann, 2013). We would

thus expect that, in countries with intermediate levels of statehood, those with a more

diversified economy including consumer-facing companies, and with an active and

respected stock exchange, will have higher environmental quality.

There are thus institutional factors, such as the shape and form of social network ties,

or the structure of the economy, which likely influence whether mixed forms of

environmental governance are effective and legitimate. In addition, we expect that

there are characteristics of the state itself, beyond its capacity or statehood, which

influence whether collaborative and adaptive forms of environmental governance –

necessitated by the complexity of environmental concerns – can be made ‘to work.’

Ostrom’s (2009) emphasis on ‘collective choice rules’ suggests that states’ posture

toward local communities procedural and substantive rights is likely to be crucial. We

would expect that states that have made commitments to participatory environmental

decision-making, and have lived up to them in policies and practices, will be more

supportive in partnering with local communities in an effective and legitimate way.

Both commitment to and capacity for such local participation are important. For

instance, we may describe the South African state as having a strong formal

commitment to participatory environmental governance, as encoded in the legislation,

but its capacity to fulfil this formal commitment is limited, especially in remote, rural

areas (Hamann et al., 2000). In addition, formal commitments may mean little unless

they are embedded in a broader, coherent policy framework. To illustrate, in Bolivian,

the state promulgated formal commitments to ensure local communities’ rights to

26
natural resources, but these were undermined by broader policy shifts that

simultaneously granted access rights to paying businesses (Perreault, 2005).

States’ interactions with market-based actors will also require them to enact roles and

skills that are different to those in traditional ‘command and control’ governance.

These include convening diverse opportunities for different stakeholders to

communicate and coordinate action, and supporting and participating in deliberative

forums, even if these are not hosted or directed by the national state itself. These are

not straightforward requirements (Dryzek, 2013). Pahl-Wostl (2007) highlights both

the need for and difficulties in the state supporting deliberative, inclusionary

approaches in water management, and O’Riordan & Stoll-Kleemann (2002) do so

regarding biodiversity conservation. Even relatively consolidated states may struggle

with adopting such approaches. For instance, despite a realization that more

inclusionary and deliberative approaches to catchment management are necessary –

especially in the context of climate change – the German state found it very difficult

to implement such approaches (Kranz, 2013). We would thus expect that, in countries

with intermediate levels of statehood, those with a state that more explicit

commitments to inclusionary and deliberative policy- and decision-making will have

higher environmental performance.

Conclusion

We commenced by highlighting the growing urgency to better understand

environmental governance, and noted that many commentators assume a

straightforward relationship between statehood and environmental quality – but this is

27
not supported by the data. We then provided an overview of the environmental

governance literature, highlighting the growing role for non-state actors and for

‘hybrid’ or ‘mixed’ governance arrangements that involve cooperation between state

and non-state actors. Yet, despite an emphasis in this literature on a diminishing role

for the state, we argue that the state still plays an important direct and indirect role in

such collaborative governance. This is particularly so when states are very

constrained, which explains the stronger and more direct relationship between

statehood and environmental performance in such areas.

Yet, as statehood increases, so does the diversity of environmental performance. We

thus went on to explain this growing variance by highlighting the role of social capital

and leadership skills in communities, industry characteristics, and the state’s

willingness and ability to adopt inclusionary and deliberative approaches to

governance. Overall, we argued that statehood plays an important role in

environmental governance and its outcomes, but in a more multidimensional and

indirect way than commonly assumed. We are only beginning to understand the

nuances of these multidimensional relationships, so this is clearly an important

domain for further study.

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Figure 1: Relationship between the Environmental Performance Index and

statehood measures, per country, in 2014

Environmental Performance Index & Statehood 2014

1
Environmental Performance Index
.8

Belarus
Armenia
.6

South Africa
.4

China
Cote d'Ivoire Malawi
.2

Madagascar
Congo
Sierra Leone
0

.2 .4 .6 .8 1
Statehood
N= 113
Higher values on y axis signal better performance in EPI

Note: The Environmental Performance Index is calculated using two sub-indices: Environmental
Health (40%) and Ecosystem Vitality (60%). Environmental Health focuses on health impacts, air
quality, and water and sanitation. Ecosystem vitality focuses on water resources, agriculture, forests,
fisheries, and biodiversity and habitat. The EPI indicators use a ‘proximity-to-target’ methodology,
which assesses how close each country is to an identified policy target. The targets are identified with
reference to international or national policy goals or established scientific thresholds. Indicator values
are calculated using publicly-available data sets from multilateral organizations, government agencies,
and academic collaborations. Source: Hsu et al. (2016). Statehood combines two components and their
empirical measurements: Monopoly on Force includes a variable that measures the proportion of a
country affected by fighting, and one that measures the failure of state authority (see Lee, Walter-Drop,
and Wiesel, 2014). The values are calculated using data from the Political Instability Task Force
(PITF) (available from http://www.systemicpeace.org/index.html). The second component is
Administrative Capacity, which is measured using the ‘Bureaucracy Quality’ indicator in the
International Country Risk Guide (ICRG)-Dataset (available via
http://epub.prsgroup.com/products/international-country-risk-guide-icrg).

37
Figure 2: Hybrid governance forms between state, market, and community

(Lemos and Agrawal, 2006: 310); CBNRM stands for Community Based Natural

Resource Management

38
 Figure 3: Governments’ and non-state actors’ incentives to cooperate, depending

on levels of statehood (adapted from Börzel and Risse (2010: 117); Hamann

(2014))

Strong

b) Non-state actors’ incentives to

Cooperation engage in cooperation
incentive

a) Governments’ incentives to
engage in cooperation

Weak
Limited
Consolidated
Statehood

39

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