Transferring Williamson's discriminating alignment to the analysis of environmental governance of social-ecological interdependence

•Transfers Williamson's Discriminating Alignment of Governance to nature-related transactions•Identifies core characteristics of nature-related transactions•Identifies the contextual differences between TCE and TCE of nature-related transactions•Illustrates discriminating alignment through a case of wildlife management•Considers TCE as useful lens for stylized analysis of environmental governance

Institutional fit is operationalized by transferring transaction costs economics (TCE) to the analysis of instances of social-ecological interdependence. We carefully spell out the differences with conventional TCE and outline analytical steps based on discriminating alignment that enable a TCE analysis of environmental governance of “nature-related transactions”. We illustrate the approach through the example of wildlife management in Germany. Here we find hierarchical governance (a prohibition) of killing of wolves embedded into a polycentric hybrid monitoring arrangement. In applying TCE to nature-related transactions, we argue that characteristics of nature-related transactions can be subsumed under the core categories of jointness, uncertainty, asset specificity, frequency, rivalry, excludability and social-relational distance. Benefits of this approach include its generating a narrow list of descriptors of instances of biophysically mediated interdependence related to one evaluation criterion: cost-effectiveness. The TCE of nature-related transactions thus identifies sets of stylized contextual factors and aspects related to the governance of hazards of ex-post opportunistic behavior that cut across scales. They can be used as composite descriptors that facilitate analysis of complex multi-scalar arrangements of natural resource governance. We propose the concept of 'governance challenge', derived from TCE, as being useful for building research on environmental governance.