Institutional Analysis, Game Models, and Polycentric Governance: Contextualizing IAD via Networks of Adjacent Action Situations

Abstract

Within the Institutional Analysis and Development (IAD) framework, the concept of an action situation generalizes the concept of a game to allow for endogenous changes in its rules. This paper re-visits this core concept to explore its potential for serving as the foundation for a systematic approach to the construction of more elaborate models of complex policy networks in which overlapping sets of actors have the ability to influence the rules under which strategic interactions take place. Networks of adjacent action situations can be built on the basis of the seven distinct types of rules that define an action situation or by separating the generic governance tasks identified by related research on local public economies. The potential of this extension of the IAD framework is demonstrated with generic network representations of three diverse policy areas (Maine lobster fisheries, international development assistance, and the contribution of faith-based organizations to U.S. welfare policy). A final implication is that application of the standard concept of Nash equilibrium may not be appropriate for analysis of policy games within a system of polycentric governance.

Keywords: game theory, institutional analysis, public policy, networks