Institutional environments and arrangements for managing complex aquatic ecosystems in forested landscapes

• The forested watersheds of the Pacific Northwest are complex aquatic ecosystems.
• These ecosystems are embedded in a complex institutional system.
• The relevance of the NIE is explored for guiding future watershed management policy.
• Polycentric approach may foster greater institutional and ecosystem resilience.

The forested watersheds of the Pacific Northwest are complex aquatic ecosystems. They are adapted to disturbance cycles that occur at multiple temporal and spatial scales. They are embedded in a complex institutional system involving multiple governance structures spanning multiple ownership types. The salmon populations that inhabit the streams, rivers, and estuaries are diffuse and provide heterogeneous values to a heterogeneous user population. Management of these watersheds has been controlled by “top down” hierarchical land management agencies with policy dictated at the federal level, but there appears to be a transition to a more collaborative multi-level, polycentric approach based on local watershed councils. In this paper, the relevance of an emerging sub-discipline of economics, known as the New Institutional Economics, is explored as a vehicle for understanding how institutional governance structures relate to characteristics of the resource and the resource user community and guiding future watershed management policy. The recently established Watershed Councils in the state of Oregon, U.S., are explored as an example of how institutional arrangements for resource management may evolve over time. While some studies evaluate the effectiveness of this decentralized approach based on participants' opinions about process, the question of effectiveness with regards to ecosystem health remains to be addressed. This is a topic for future research.