Polycentricity and state reinforced self-governance: the case of the New York City watersheds governing arrangement

Research, part of a special feature on State-Reinforced Transformative and Adaptive Governance of Sustainable Social-Ecological Systems

INTRODUCTION

Almost all municipalities in the United States that provide drinking water from surface sources treat and filter it prior to delivery, as required under federal law. However, municipalities that control their source waters and watersheds may avoid filtration if the water, at the source, meets drinking water quality standards. Only a few municipalities (including Boston, New York, San Francisco, and Seattle) hold filtration waivers from the U.S. Environmental Protection Agency (US EPS) for a portion, or all, of their drinking water (US EPA 1999). The largest municipality holding a filtration waiver is New York City.

To obtain a “Filtration Avoidance Determination” (FAD) and deliver unfiltered drinking water to its residents, New York City needed to satisfy a series of strict federal standards. Meeting the standards required controlling multiple human activities affecting water quality, which clashed with another valued public good: local economic development in the watersheds. Farming, private and public septic systems, de-icing roads in the winter, industry discharges, among many other human activities are sources of surface water pollution. From the perspective of the communities in the watersheds, protecting water quality for New York City meant imposing limitations on their economic activities. Thus, balancing the provisioning, management, and use of water quality and economic development required actors with different interests and goals to cooperate to resolve multiple and interdependent common-pool resource and public good dilemmas (Ostrom et al. 1994). If those who benefit from water quality do not benefit from local economic development and vice versa, as may occur in watershed landscapes characterized by upstream and downstream users and activities, then that divide must be bridged as well.

In the New York City Watersheds, a century of encroachment by the city on watershed lands had produced a hostile relationship between the watershed’s residents and city representatives (for a detailed historical account of such relationship, see Soll 2013, Galusha 2016). Notwithstanding, in 1997, New York City along with jurisdictions and organizations in the Catskills and Delaware watersheds developed a complex governing arrangement to protect source waters and permit environmentally sensitive economic development. The complex governing arrangement has remained in place for over 25 years (National Academies of Sciences et al. 2020).

The New York City watershed governing arrangement is an ideal case for further developing and extending the theory of polycentricity (Ostrom et al. 1961, Ostrom 1999). In particular, the concept of “general system of rules” has received modest attention (Carlisle and Gruby 2019, Thiel and Moser 2019). By “general system of rules,” Vincent Ostrom (1999), meant the prescriptions that may be drawn upon by citizens and public officials to structure relationships among jurisdictions and organizations in shared settings. We develop the general system of rules dimension of polycentricity theory by drawing upon research by Oakerson and Parks (1988, 1989, 2011) and state reinforced self-governance principles (SRSG) proposed by Sarker (2013) and further developed by DeCaro, et al. (2017). The conceptualization of levels of governance by Oakerson and Parks (1989) allows us to more clearly distinguish a general system of rules from the polycentric governing arrangements that they enable, thus allowing us to further develop the theory of polycentricity. The SRSG principles provide a set of governance concepts (e.g., authority, responsibility, accountability, and adaptability) that permit scholars and practitioners to systematically examine and evaluate the capabilities of institutional arrangements to support the emergence and persistence of coordination and cooperation. We use the principles to assess both the enabling general system of rules and a polycentric governing arrangement that was created. We use the SRSG principles to assess whether a general system of rules provides actors with adequate institutional tools to create workable polycentric arrangements, focusing on the following questions: do general systems of rules provide actors with the authority to engage in mutually beneficial agreements whereby they commit to undertaking costly activities for their shared benefit? Can actors raise or obtain necessary resources to underwrite their efforts? Can they create, or do they have access to, means by which they can hold one another accountable to their commitments? Do actors have the authority, or have access to venues, that permit them to revise the governing arrangements they have created?

We also use the SRSG principles to assess the capabilities of the New York City watersheds polycentric governing arrangement. How are authority, responsibility, accountability, and resources distributed to support cooperation and coordination among members, encouraging compliance while allowing for adaptation? In addressing the above questions our intention is to further specify polycentricity theory.

We introduce polycentricity theory and Vincent Ostrom’s general system of rules and use the work of Parks and Oakerson (1989) to further develop the concept. We also identify and explain the SRSG principles, how they work synergistically to characterize robust institutional arrangements, and how they may be used to assess governing arrangements. We develop the case study of the New York City watersheds governing arrangement, and the general system of rules, highlighting key federal and state laws and regulations that enabled its creation and maintenance. We apply the SRSG principles to the general system of rules and to the regional governing arrangement to pinpoint how the design of both allows for and supports long-term cooperation. Through this analysis we identify institutional innovations, as well as limitations and challenges. We conclude by reflecting on how the general system of rules allows for the further specification of polycentricity theory, and how the SRSG principles may be used to identify and address institutional gaps in the New York City Watersheds governing arrangement.

THEORY: POLYCENTRICITY AND THE PRINCIPLES OF STATE REINFORCED SELF-GOVERNANCE

The earliest definition of polycentric political governance was provided by Ostrom et al. (1961:31-32):

“Polycentric” connotes many centers of decision making that are formally independent of each other. ... To the extent they take each other into account in competitive relationships, enter into various contractual and cooperative undertakings or have recourse to central mechanisms to resolve conflicts the various political jurisdictions in a metropolitan area may function in a coherent manner with consistent and predictable patterns of interacting behavior.

A decade later, V. Ostrom (1999:58) added a key feature of polycentric governance: a general system of rules “providing a framework for ordering relationships in a polycentric system.”^[1] Relations among governments, organizations, and individuals are built on constitutions, laws, and regulations, and scholars should be more cognizant of the roles they play in permitting polycentric arrangements.

V. Ostrom (1999:59-60), proposed that a general system of rules should include three levels of conduct. First, it should establish “the conditions of entry and exit” in the polycentric arrangement (Ostrom 1999:59). A general system of rules should provide individuals with incentives to form “public enterprises” to engage in exchange. Examples include the ability to create different forms of organization, such as special districts, non-profits, different types of public enterprises, and private firms. Second, means by which individuals can engage in “the enforcement of general rules of conduct” must be made available (Ostrom 1999:60). Participants in an emerging polycentric governance order must be willing to monitor and enforce rules of conduct and must have the tools to do so if the polycentric system is to be viable. In other words, participants require the authority and means to hold one another accountable. Third, individuals must be allowed to participate in “the formulation and revision of the basic rules of conduct” (Ostrom 1999:60). People and organizations must be able to engage in devising and revising intergovernmental agreements, joint ventures, contracts, associations, and multipurpose and special purpose governments. These three levels of conduct provide the potential for polycentric systems to be “created as a matter of conscious design” (Ostrom 1999:60).^[2] Polycentric arrangements may be created by individuals who seek to resolve shared problems and/or supply shared benefits if the “institutional scaffolding” provides workable enabling conditions (Thiel and Moser 2019:65).

Oakerson and Parks (2011:152) label the general system of rules, “governance” that “supplies the institutional structure within which patterns of provision and production are created and modified.”^[3] For Parks and Oakerson (1989:25), the foundational level of governance are the “legal tools of association.” They are sets of rules for creating provision and production arrangements (V. Ostrom’s conditions of entry and exit). Found in state and federal law, they include “rules of incorporation, annexation, and consolidation, fiscal and regulatory rules, and rules bearing on interlocal agreements and the organization of production” (Parks and Oakerson (1989:25). Citizens and public officials can draw upon legal tools of association to create governments, agencies, and organizations, specify relationships among them, and identify the types of goods and services that should be made available.^[4] The legal tools of association may be used to create a polycentric arrangement, such as the New York City Watersheds governing arrangement described and analyzed below; or their use may result in the piecemeal emergence of a polycentric arrangement as the legal tools and the provision units are adjusted and modified over time to address regional and local problems (Parks and Oakerson 1989).

Parks and Oakerson (1989:25) argue that U.S. metropolitan areas, which are a specific type of polycentric arrangement, perform better if “residents of relative communities of interest decide for themselves how to organize provision and production” (V. Ostrom’s third type of conduct). This is because residents and their representatives will be better able to devise governing arrangements to meet demand for different types and levels of public goods and services. Oakerson and Parks (1989) recognize, however, that the capacity of people and public officials to develop more effective governing arrangements is not a given. Rather, it depends, in part, on the types of legal tools of association made available, and how skillfully they are used to design governing arrangements well matched with the biophysical and material context and community setting.

The state reinforced self-governance (SRSG) principles (Sarker 2013, DeCaro et al. 2017) provide an approach for assessing both the general framework of rules and the polycentric governing arrangements nested within them.^[5] For the general framework of rules the SRSG principles are used to assess their capacity to empower actors to create and sustain governing arrangements. For the governing arrangements, the SRSG principles are used to assess their capacity to provide for, produce, and maintain public goods and common pool resources. The principles guide policy analysts by focusing on the distribution or allocation of distinct powers represented by the SRSG principles.^[6]

First is the authority to create governing arrangements and to provide for, produce, and manage public goods and common pool resources. Oakerson and Parks (2011:153) explain that individuals are granted authority to make choices across a range of governance related topics, such as “rule making, application, enforcement, and modification.” DeCaro, et al. (2017) also emphasize implementation, such as making decisions, carrying out plans, and otherwise engaging in self-governance. Authority empowers the creation of polycentric arrangements by providing institutional tools that allow actors to bring organizations and relationships into being.

Second is the responsibility to contribute to the resolution of common pool resource and public goods dilemmas. As DeCaro, et al. (2017) explain, organizations are assigned obligations for meeting standards or achieving desirable outcomes. These obligations originate from laws that assign responsibilities to specific actors. For instance, the U.S. Safe Drinking Water Act grants the US EPA authority to assign the responsibility of meeting the Act’s requirements to state agencies. Responsibilities motivate actors to attempt to address common pool resource and public goods dilemmas. Whether and how they respond depends on their authority.

Third is tangible support, which if made available, allows actors to carry out their responsibilities and authorities. Oakerson and Parks (2011) refer to this as fiscal authority. DeCaro et al. (2017) expand the concept to include technical and financial support, including intergovernmental transfers of resources as well as the authority to collect and spend revenues (e.g., user fees, taxes, bonds, etc.).

Fourth is accountability. Actors that share authority and responsibility for addressing dilemmas may hold one another to account to follow through with their commitments or exercise their authorities appropriately. Actors may exercise accountability in a variety of ways depending on what may be made available to them, such as third-party review, elections, and enforcement mechanisms that may impose sanctions for failing to follow the rules. Oakerson and Parks (2011) and Thiel and Moser (2019) extend the exercise of accountability beyond the more conventional mechanisms to include voice and exit. Voice allows residents to participate in creating governing arrangements. Being able to terminate an agreement, or secede from a governing arrangement, supports the exercise of accountability (Bednar 2008, Beramendi 2012).

Fifth is balancing stability and flexibility, or adaptation. Balancing stability and flexibility so that the general system of rules and governing arrangements remain fixed while also providing opportunities for adaptation and change in order to respond to disturbances is a delicate process. Too much change may lead to uncertainty and even noncompliance as existing rules become less credible. Too much stability, however, may lead to rigid institutions unable to respond to new circumstances (Bednar 2008). Finding a workable balance is a function of the distribution and interaction of authority, responsibility, tangible support, and accountability made by the general set of rules and the governing arrangement. If the general set of rules provides actors with diverse sources, or broad grants, of authority, they may be able to respond to disturbances in a relatively timely fashion. If a range of mechanisms are in place that allow for the review of the exercise of that authority and confirm it is used for compliant purposes, then a workable balance between stability and flexibility may be realized. Allowing for stability and innovation of governing arrangements is possible with predictable decision-making points, such as legal sunsets or regulatory review (DeCaro et al. 2017). These mechanisms allow for modifications and updating while maintaining institutional coherence.

These same principles that may be used to evaluate a general system of rules may also be used to assess the design of polycentric governing arrangements and evaluate their performance. In creating, or assembling, revising, or extending a polycentric governing arrangement, does the authority and responsibility assigned to actors encourage them to provide for and produce public goods and services? Have actors been invested with the authority to raise revenues, or have access to revenue sources that allow them to produce adequate and appropriate public goods and services? Do actors have access to and make use of various accountability mechanisms that encourage compliance and support long-term commitment to the governing arrangement? Can actors add to or adapt the polycentric arrangement to better address emerging problems and demands? At this conceptual level, the level of practice, it is about evaluating the operation and functioning of a polycentric system (Oakerson and Parks 2011).

Table 1 represents how the SRSG principles may be used to assess the general system of rules and polycentric arrangements. The first column lists the individual SRSG principles. The second and third columns identify types of institutional empowerment and types of institutional arrangements, respectively, that analysts should attend to in evaluating the extent to which a general system of rules and a polycentric arrangement exhibit a SRSG principle.

The principles are evaluative. They allow policy scholars and analysts to evaluate whether the actors engaged with the creation or revision of polycentric arrangements, or with the implementation of a polycentric arrangement possess some level of ability or capacity to create institutional arrangements or take actions to address public goods and common pool resource dilemmas (authority), specify or achieve scope conditions (responsibility), create or take action to raise, obtain, disperse, and use fiscal and technological resources (tangible support), to create or take actions to review and reward or sanction actions taken by other actors, and to engage in the creation or revision of the general system or rules or polycentric governing arrangements (adaptability). The evaluative principles are distinct from the constitutions, laws, and regulations that create the specific mechanisms that make possible the ability to exercise the activities that represent the principle.

To evaluate the performance of the general system of rules and polycentric arrangements, it is necessary to apply the principles holistically. Together the combinations of principles that are present or absent provides a more complete assessment of institutional arrangements. For example, if the general system of rules makes available a selection of institutional tools and accountability mechanisms and appropriately assigns responsibility, it provides the institutional scaffolding for actors to potentially create polycentric governing arrangements that support productive relations among actors. If authority and responsibility overlap, and if combined with fiscal resources that allow some actions to be taken, cooperation may emerge, and it may be sustained if actors can hold one another accountable. Ensuring actors follow through with their commitments by providing for third party review, or by conditioning the benefits actors receive to the performance of their obligations supports the exercise of authority in accordance with the agreed-upon rules. Paraphrasing Parks and Oakerson (1989), by linking governance structures to organizational structures and to performance, it may be possible to diagnose the strengths and limitations of governing arrangements more precisely and to propose corrective measures at the appropriate level of governance.

DATA AND METHODS

We rely on a combination of qualitative content analysis (White and Marsh 2006) and personal experience in the implementation of the New York City Watersheds governing agreement. One of the coauthors has been involved in the implementation of the agreement since 2003, whereas the remaining coauthors have a decade of experience studying the case (see Hanlon et al. 2019, Schlager et al. 2021, Olivier and Schlager 2022). The authors’ past experience with the case allowed the identification of key legislation and regulations that structure this governing arrangement (see Fig. 1 for a graphical representation of this regulatory framework).

To identify and list the relevant legislation comprising the general system of rules, we followed a three-pronged approach. First, we consulted with one of the first authoritative reports analyzing the governing arrangement, conducted by the National Academy of Sciences in 2000 (National Research Council 2000). This report identifies a number of state laws that are critical for the functioning of the governing arrangement. To expand on this initial list, we then reviewed the corpus of New York State laws that relate to local governments, nonprofit organizations, and drinking water. As a third step, we consulted with one of the coauthors, who has been involved in the governing arrangement for over 20 years, to review the state laws and regulations we identified. To identify the agreements, rules, and regulations that constitute the governing arrangement, we first reviewed the 1997 Memorandum of Agreement, which creates the governing arrangement. After that, we reviewed all iterations of the Filtration Avoidance Determinations (see Table A2 in Appendix 1), which are the key regulatory documents for this governing arrangement, for mentions of all watershed protection programs, regulations, and laws that constitute the governing arrangement. Through this, we were able to identify watershed protection programs implemented by the Catskill Watershed Corporation (CWC). For each program, we identified, downloaded, and analyzed the corresponding program rules developed by CWC. Finally, we consulted with our coauthor who is CWC’s Corporate Counsel to ensure that no agreements, rules, or regulations were missing and that we had access to the most up-to-date version of all of them.

Once identified, we conducted a qualitative content analysis of the different regional agreements that explicitly create the agreement, as well as the state, federal, and local regulations that enabled the creation of the agreement. This approach was conducted in two stages: first, we assessed the federal and state legislation and regulations enabling the creation of the governing arrangement. These are what V. Ostrom would label “the general system of rules” (see Table A1 in Appendix 1). Second, we analyzed the rules and regulations that created the governing arrangement, as well as the rules and regulations that provided for the goods and services that would help achieve the goals of the agreement: land acquisition and watershed protection programs (see Table A2 in Appendix 1 for a list of the rules and regulations that create and define the extent of the agreement).

The New York City Watershed has long been considered a successful example of regional governance of water resources (see, for instance, National Academies of Sciences et al. 2020, National Research Council 2000, Pires 2004, Biddle and Baehler 2019). This categorization is also supported by the repeated issuance of Filtration Avoidance Determinations by the US EPA and the New York State (NYS) Department of Health, which certify that the overall agreement is achieving its goal of maintaining water quality standards as defined by Federal and State regulations. Given that the U.S. federal government and New York State have, over the last 27 years, certified that drinking water quality standards are being met, we explore the general system of rules and the institutional authorizations they make available to the watershed actors to consciously design a polycentric watershed governing system. We also examine the polycentric watershed governing system. In both instances we use the SRSG principles (see Table 1) to evaluate how the institutional possibilities provided by the general system of rules and the New York City Watersheds governing arrangements enabled and allowed for the practice of self-governance.

THE GENERAL SYSTEM OF RULES AND THE NEW YORK CITY WATERSHEDS GOVERNING ARRANGEMENT

The New York City Watersheds (Fig. 2) comprise two water supply systems distributed along eight counties north of New York City: the Catskill/Delaware supply system in Delaware, Greene, Schoharie, Sullivan, and Ulster counties; and the Croton supply system in the counties of Dutchess, Putnam, and Westchester (NYC Department of Environmental Protection [date unknown]: Water supply). The Catskill/Delaware system, which supplies 90% of New York City’s drinking water, is located west of the Hudson River and is the subject of the governing arrangement and filtration waiver. The Croton supply system, located east of the Hudson River, supplies the remaining 10%. This water is filtered and treated and is not under a filtration waiver (National Academies of Sciences et al. 2020).

With the support of the state, New York City built most of its Delaware Catskills water supply and distribution system during the first half of the 20th century. The city was able to condemn property needed to accommodate the reservoirs, tunnels, and aqueducts. Farms, homes, businesses, even the occasional village were taken to create the reservoirs. In addition, the city maintained a presence in the watersheds, including a police force to protect water infrastructure as well as placing limits on recreational activities on city owned land and reservoirs. The city also implemented and enforced watershed rules and regulations, requiring permits for activities, such as building roads, bridges, and commercial and residential buildings (NYC Department of Environmental Protection, [date unknown]: Regulations, NYC Department of Environmental Protection 2019).

This setting represented a highly fragmented polycentric arrangement, with the concentration of authority over the waters and land uses residing with New York City, and with watershed jurisdictions having little say in how water and water related activities were managed, other than to file lawsuits. This institutional setting produced disagreeable and strained relations between the city and the watershed jurisdictions and residents (Soll 2013). Relations became even more strained in 1986 when the U.S. Congress amended the Safe Drinking Water Act, requiring water providers to filter all surface water sources prior to delivery to customers (Safe Drinking Water Act Amendments of 1986, 2023). In other words, a change to the general system of rules set the stage for transformational change in the governance of the New York City watersheds.

The general system of rules enabling the New York City watersheds governing arrangement

In response to the amended Safe Drinking Water Act, the US EPA issued the surface water treatment rule in 1989. It provided two alternatives, (1) public water system must filter all surface drinking water supplies, or (2) avoid the expense of filtration (40 CFR 141.71 2023) by demonstrating, “through ownership and/or written agreements with landowners within the watershed that it can control all human activities which may have an adverse impact on the microbiological quality of the source water” (40 CFR 141.71 (2) 2023). Such an arrangement would qualify the public water system for a Filtration Avoidance Determination.

The city had to decide how it would remain in compliance with federal drinking water standards. It could (1) build and operate the infrastructure to filter all of its drinking water supplies, which would be exceedingly costly (Finnegan 1997); (2) make greater use of its eminent domain and regulatory powers to gain more control of human activities that affect water quality in the watersheds, which would be time consuming and costly, as watershed jurisdictions would likely file lawsuits to protect their interests; or (3) create an agreement with the watershed jurisdictions to manage human activities in the watersheds in a manner agreeable to all parties. Federal and state laws allow for each of the three options. Although option 3 was pursued, it was not inevitable.^[7]

Figure 1 provides a graphical representation of the legal and regulatory context enabling the creation of the New York City Watershed Memorandum of Agreement, which replaced a highly fragmented polycentric arrangement with a more cohesive polycentric governing arrangement that allows multiple actors to participate in water quality governance. Federal laws establish source water and drinking water standards that must be met by water providers and under specific guidance, allow states to implement them. Through its constitution and laws, New York State provides local jurisdictions with the authority to engage in inter-governmental agreements to coordinate the provision and production of public goods and services, all necessary to engage in shared governance.

Safe Drinking Water Act Primacy, state permitting, and regulatory authority

Some federal laws, such as the Clean Water Act and the Safe Drinking Water Act, allow the US EPA to authorize states to administer federal laws. Known as primacy, it is a certification process whereby states that meet certain criteria take over administration of federal environmental permitting programs (US Environmental Protection Agency 2023). It allows for state control of what would otherwise be a federal program, and it also allows a state to impose additional stricter standards than contained in federal regulations.

The US EPA, under the Safe Drinking Water Act, eventually granted primacy to New York State to issue the filtration avoidance determination (FAD) to New York City. For the first 10 years of the Memorandum of Agreement (MOA), (1997–2007), the US EPA exercised the authority to issue filtration avoidance determinations. Once the EPA was satisfied that the MOA and its implementation adequately controlled all human activities that “may have an adverse impact on the microbiological quality of the source water” (40 CFR 141.71 2023), it stepped back and passed that authority to the State of New York.

Under state law, New York City is required to have a state water permit to withdraw and deliver water to its customers (New York Consolidated Laws, Environmental Conservation Law 2023). The state water permit, as explained below, is used to hold New York City accountable for complying with key aspects of the Memorandum of Agreement. If the city is found out of compliance, the permit may be suspended, which could threaten the re-issuance of the FAD.

Municipal rights and inter-municipal agreements

The New York State Constitution Article 9, § 2 guarantees local municipalities certain self-governance rights, known as home rule. The home rule rights include “government, protection, order, conduct, safety, health and well-being of persons or properties” within the town (New York State Constitution Article 9, § 2 (c)(10) (2023))

In addition, New York State Law allows towns and other municipalities to enter into contracts, including inter-municipal agreements (New York Consolidated Laws, Town Law 2023). New York Town Law § 64 (6) authorizes towns to enter into agreements, and Article 5G of New York’s General Municipal Law (2023) empowers local governments to enter into “joint service agreements” and “cooperative investment agreements” for any municipal facility, service, activity, project, or undertaking or the joint performance or exercise of any function or power. Both laws require that the contracts or agreements be approved by the governing boards of the involved towns, municipalities, or districts. These laws allowed the local watershed towns to band together under a Coalition of Watershed Towns, to negotiate the MOA and to participate in elections for members for one of the governing boards created by the MOA.

Non-profits and accountability

New York State law allows local jurisdictions to create non-profit organizations to provide for and implement public services (New York Not-for-Profit Corp. Law § 1411 2023). The New York City watersheds agreement used this law to create a regional non-profit organization, the Catskill Watershed Corporation (CWC), governed by the watershed towns and New York City, and tasked with implementing key aspects of the MOA.^[8] The New York State Attorney General has primary responsibility for oversight and regulation of not-for-profit corporations. This includes required reporting as well as the power to audit and request records. In addition, the CWC, pursuant to its by-laws as well as the Watershed MOA, is subject to several good government laws, including the Freedom of Information Law and Open Meetings Law. Both laws allow the public and interested stakeholders to inquire of CWC’s transactions and activities, or to simply attend a meeting to watch it firsthand. CWC is also subject to oversight by the New York Authorities Budget Office. This includes required training for all CWC Board members and annual reports describing CWC’s activities and the identity of each recipient of CWC funding.

The institutional scaffolding of federal and state laws provided a range of tools to local jurisdictions to attempt to create a polycentric arrangement (see Fig. 1, general system of rules). Federal law invited the creation of such an arrangement, and state law provided for contracts, intergovernmental agreements, organizations, and accountability mechanisms to be used in its construction. The three levels of conduct specified by V. Ostrom (1999) are present. Federal and state laws allow for the creation of different forms of organization, such as intergovernmental arrangements, joint ventures, and non-profit organizations (the conditions of entry and exit). Accountability mechanisms, from courts to audits to open meeting laws support compliance with the general system of rules (enforcement of general rules of conduct). Finally, individuals and elected officials are empowered to revise the polycentric governing arrangements they create using the tools made available to them through the general system of rules (formulation and revision of basic rules of conduct).

Creation of the polycentric arrangement: the New York City Watersheds Memorandum of Agreement (MOA)

In 1997, New York City, more than 50 local governments in the watersheds, the State of New York, the US EPA, and environmental organizations signed the New York City Watershed Memorandum of Agreement (MOA), which replaced a highly fragmented approach to water governance with a more cohesive polycentric governing arrangement drawing upon the federal and state laws as described above (Hanlon 2017). New York City and the watershed jurisdictions rested the agreement on two foundational principles. First, the city agreed to suspend use of its eminent domain powers to acquire land in the watersheds, and instead, committed to only acquiring land from willing sellers. Second, the watershed towns agreed to refrain from suing the city over the MOA or the FADs. Crucially, the MOA makes all its signatories responsible for the Water Supply Permit that the state issues periodically to New York City. If the city is out of compliance with the MOA, the other signatories to the agreement may ask the NY State Department of Environmental Conservation to suspend the Water Supply permit, thus effectively putting the city in noncompliance with the Filtration Avoidance Determination.

The MOA created two decision making venues for implementing the arrangement. The Catskill Watershed Corporation (CWC) is a locally controlled, city-funded, non-profit local public authority that devises and enacts infrastructural, economic, educational, and ecological programs in the watershed. All 39 towns within the watershed are members of the organization, a subset of jurisdictional representatives sit on its board and the board can amend CWC’s by-laws (MOA, Article 4). Anticipating how disputes over interpretation of the agreement could be costly to all signatories, the MOA created the Watershed Protection and Partnership Council (WPPC) to serve as a low-cost conflict resolution venue (Hanlon 2017; MOA Article 4). For example, in 2004, the Coalition of Watershed Towns threatened to sue the city for non-compliance with the MOA. At issue was whether deer hunting is a “historical use” that should be allowed on city-owned land in the watershed. The complaint was referred first to the WPPC, after which the NYCDEP and CWC subsequently met and specified deer hunting as a permissible “historical use” in the Water Supply Permit (Hanlon 2017).

One of the most controversial issues during the negotiation of the agreement concerned land acquisition by the city to satisfy different watershed protection requirements mandated by the filtration waiver. By limiting or eliminating land uses that would lead to siltation, contaminated runoff, or other pollutants entering waterways, water quality is protected. From the perspective of the watershed communities, land acquisition had the potential to undermine development by taking desirable plots of land out of production, as well as infringing on the autonomy of local jurisdictions and potentially undercutting their tax base. As a result, the MOA created a Land Acquisition Program (LAP), establishing a collaborative approach through which both the city and watershed communities participate in a process of identification, vetting, and valuation of land to be acquired by the city to satisfy FAD requirements (MOA Article 2; National Academies of Sciences 2020).

Another approach for protecting water quality in the watersheds is addressing sewerage and run off. The MOA authorized the CWC to develop and implement (with city funding) different forms of wastewater treatment and stormwater management (MOA Article 5). Rehabilitating existing wastewater treatment plants and building new ones, gave way to septic programs, beginning with residential septic and extending to systems for non-profit organizations and businesses (CWC Articles 2A, 8, 10, 13, 15). Stormwater management programs assist property owners (jurisdictions, organizations, and individuals) in developing and maintaining stormwater infrastructure to comply with federal, state, and New York City rules and regulations (CWC Articles 5 and 7).

Although programs that directly protect water quality form the core of the watersheds governing arrangement and achieve the filtration avoidance determination, the economic development programs are equally important for the watershed jurisdictions and residents. The MOA provided for an endowment funded by the city, to be used by the CWC and its members to create and implement grant and loan programs targeting a range of activities from job creation to main street beautification, including the acquisition of land and buildings vital for business purposes (CWC, Article 1).

In sum, the MOA represents a polycentric arrangement where local, state, and federal regulations are intertwined to create a series of credible commitments among actors with a history of conflict and animosity. The core of this governing arrangement involves three interdependent elements (see the triangle in Fig. 1): a Filtration Avoidance Determination (FAD), issued by the New York State Department of Health, which authorizes New York City to use unfiltered water from the Catskills, contingent upon a series of land acquisition and watershed protection activities; a Water Supply Permit (WSP), issued by the New York State Department of Environmental Conservation, which authorizes the city to draw water from the watersheds for drinking purposes and regulates the land acquisition process, and is used to maintain the city’s compliance with the MOA; and a Memorandum of Agreement (MOA), signed by the city, watershed communities, the state, the federal government, and environmental organizations that provides for and produces water quality and environmentally sensitive economic development.^[9]

ASSESSING THE GENERAL SYSTEM OF RULES AND THE NYC WATERSHEDS GOVERNING ARRANGEMENT USING THE SRSG PRINCIPLES

We analyze the general system of rules and the polycentric governing arrangement using the five SRSG principles outlined above. We do so to explore whether and how rules at both levels allocate authority, responsibility, resources, and accountability among the participants, as well as provide the means for adaptation. Using the SRSG principles to examine the extent to which self-governance is realized allows us to assess the strengths and limitations of both the general system of rules and the governing arrangement as well as further extend the theory of polycentric governance.^[10]

Authority and responsibility

Authority and responsibility in the general system of rules

At the federal level, two types of authority set the stage for the creation of the NYC watersheds polycentric governing arrangement. First, the rules implementing the amendments to the Safe Drinking Water Act recognized an alternative to filtration. An intergovernmental agreement that controls “all human activities which may have an adverse impact on the microbiological quality of the source water” would be accepted in lieu of filtration. Supporting this invitation was the federal government’s practice of primacy, which gives states control of what would otherwise be a federal program. Under New York State law, the Departments of Health, and of Environmental Conservation were assigned authority for implementing parts of the U.S. Clean Water and U.S. Safe Drinking Water Acts, making the two state agencies critical partners in the governing arrangement. As a home rule state, New York had already provided local jurisdictions with a range of institutional tools allowing them to exercise authority to create and implement a regional governing arrangement for providing public goods and services. Now it was a matter of the city, towns, and counties choosing to exercise those authorities to create a polycentric governing arrangement (see Table A1).

Authority and responsibility in the governing arrangement

The constitution of the governing arrangement is the MOA, which distributes authority and responsibilities among the signatories to the agreement. In turn, individual water quality and economic development programs, created by the MOA, further distribute authority and responsibility for specific activities. Under the MOA, the major responsibilities of New York City changed little. The city remains responsible for meeting federal water quality standards, i.e., the filtration avoidance determination is issued to the city, and for paying for its drinking water system. What significantly changed with the adoption of the MOA was the allocation of authority, which no longer rested with only the city; it was now shared with the many watershed jurisdictions.

The MOA creates two venues, one for collective choice decision making and the other for conflict resolution. For decision making, the MOA established the Catskill Watershed Corporation (CWC), granting it the authority to develop and implement city-funded infrastructure, economic development, and education programs in the watersheds, examined below (MOA Article 4). The CWC governing board consists of members representing the city, New York State, watershed jurisdictions, and environmental groups, thus expanding the scope of authority to achieve water quality standards to a broader set of interests. To resolve conflicts among MOA members and avoid litigation, the MOA created the Watershed Protection and Partnership Council (WPPC; MOA Article 4). A party to the MOA may raise a complaint with the WPPC, which then considers and attempts to resolve the matter (MOA Article 4). Over time, few complaints emerged, and the center of dispute resolution shifted to the CWC. The CWC board and its working committees meet monthly, providing members with regular opportunities for discussing a range of issues. The WPPC, however, remains available for dispute resolution if needed.^[11]

The MOA also redefined procedures for the acquisition of land for watershed protection purposes, reallocating authority among MOA members. Instead of using its power of eminent domain, the city must present land acquisition plans to towns and villages, and consult with their chief elected officials prior to soliciting landowners to voluntarily participate in the program (MOA Article 2, section 71). When the city does purchase land or easements, fair market value is determined by an independent appraiser hired by the city, in consultation with an appraiser hired by the selling landowner (MOA Article 2, section 61). Furthermore, towns and villages may exempt certain parcels from acquisition to preserve the character and the economies of their jurisdictions (MOA Article 2, section 68). The city places conservation easements on the land it acquires, which are held by the New York Department of Environmental Conservation to ensure the land is protected from development in perpetuity (MOA Article 2, section 82).^[12]

The city not only shares authority over its land acquisition programs with the watershed jurisdictions, but under the MOA it also shares the authority to create and revise watershed programs with the CWC. The extent to which that authority is shared varies by the type of program. The programs that directly target water quality, such as water quality infrastructure, septic systems, and stormwater management, and are critical for obtaining the FAD are highly collaborative. The CWC and the city periodically sign contracts (enabled by state law), which develop project design, provide funding mechanisms, and develop CWC policies to guide implementation. Both the city and the CWC must agree to proposed changes to these programs. By contrast, the CWC maintains full autonomy regarding the design and implementation of economic development programs, which are paid for through an endowment created by the city. The economic development programs are not part of the filtration avoidance determination; rather they serve the needs of the watershed residents and jurisdictions.

Finally, decisions regarding education programs are coordinated between the city and CWC. These programs consist of small grants aimed at communicating the role of the watersheds in providing clean drinking water to New York City. The CWC implements the program, making suggestions on potential grant candidates, with the city and CWC then jointly deciding on the allocation of funds. Education programs, however, have also received funding from other sources (such as the U.S. Forest Service; see Galusha 2016), which has allowed CWC to have ultimate decision-making authority over certain education grants.

State agencies, the city, and watershed jurisdictions have made use of the general system of rules provided by federal and state laws to create a governing arrangement that allocates authority broadly, encouraging widespread participation in decision making and program implementation. Responsibilities remain targeted, with the city responsible for funding programs, the city and CWC responsible for designing and implementing programs effective for achieving water quality standards, and the CWC responsible for stewarding the economic development programs.

Tangible support

Tangible support in the general system of rules

Local home rule authority grants local governments autonomy to decide on the provision of public goods and the creation of interlocal arrangements, including the ability to raise taxes authorized by the legislature and adopt assessments for public services (New York Department of State, Division of Local Government Services 2023). The New York City Municipal Water Finance Authority, located within the New York City Department of Environmental Protection, assesses fees and issues bonds for the construction, operation, and maintenance of water and sewerage systems (N.Y.S. Ch 43A, Article 5, Title 2-A). In addition, the New York Not-for-Profit Corporation Law, allows local governments to create “local development corporation[s]” (New York Not-for-Profit Corp. Law § 1411) with a wide variety of authorities, including charging for services and receiving and spending funds, if these activities do not attempt to influence legislation or participate in political campaigns (New York Not-for-Profit Corp. Law § 1411(c)). Together, these different laws provide the framework for (a) New York City to participate in the creation and funding of the CWC as a local development corporation and, (b) CWC to fund activities related to the purchase, maintenance, and rehabilitation of infrastructure, the provision of financial assistance and technical information, and receiving loans, all with the purpose of furthering local economic development.

Tangible support in the governing arrangement

Funding of watershed protection and land acquisition activities is provided by the city. Activities carried out by CWC are funded by periodic contracts between the city and CWC, stipulating broad conditions for a program, deadlines, and funding mechanisms. This holds for all CWC programs except for economic development programs, which is based on a one-time-only contribution by the city of $59.7 million dollars for the creation of the “Catskill Fund for the Future,” which was used to create a revolving fund (Galusha 2016). In addition, the city pays local property taxes on its held parcels and previously acquired reservoir lands, contributing to the public revenues of upstate towns and counties where thousands of acres for the reservoirs were acquired by eminent domain.

Municipal water utilities in the U.S. rely on issuing bonds, and assessing fees and water charges to pay for the construction, operation, and maintenance of their water infrastructure. New York City is no different, except the water infrastructure it pays for does not include water filtration plants. Rather it pays for the range of programs and activities specified in the MOA, which serve to protect the source waters it relies on for its drinking water supplies.

Accountability mechanisms

Accountability mechanisms in the general system of rules

Federal and state laws provide several accountability mechanisms, some used by federal and state officials and others by the signatories to the governing arrangement to ensure compliance. Every 10 years, with a five-year intermediate review, the activities directly contributing to water quality protection and enhancement, is reviewed through the filtration avoid determination (FAD) process (FAD 2002, 2007, 2012 2017, 2022). Prior to each FAD review, the city develops a report that assesses the actions that have been taken, e.g., number of septic systems replaced, acres of land acquired, etc., and proposes additional or new activities to be undertaken. Hearings and comment periods allow for stakeholder input, and a final judgment, an updated FAD, is issued by the New York State Department of Health (NYC Department of Environmental Protection 2021).

New York State’s courts are also an important compliance mechanism used by the signatories to the MOA for addressing disagreements. For example, between 2000 and 2010, the city sued Watershed towns 10 times over tax assessments on city owned lands. The expense of litigation and desire to resolve the underlying conflict prompted the Governor to intervene and eventually the city and CWC created a new tax assessment tool agreeable to all parties (Hanlon 2017, CWC Article 16).

Finally, the New York State Laws used to create the governing arrangement provide different accountability mechanisms. One of the most crucial is the water supply permit issued to the city by the New York State Department of Environmental Conservation. The city is required to have a water supply permit before it can deliver drinking water. The water supply permit authorizes the land acquisition program. If the city fails to follow through with its funding commitments to the CWC programs, the watershed jurisdictions may petition NYSDEC to suspend the city’s water supply permit, thus suspending the land acquisition program (MOA Article 2). Because the land acquisition program is the foundation for the renewal of the Filtration Avoidance Determination, suspending the water supply permit would undermine the issuance of a new FAD (Hanlon et al. 2019).

Other state laws require the CWC to conduct financial audits and to issue annual reports including listing the recipients of funds. The MOA also made CWC subject to the Freedom of Information and Open Meetings laws, which require CWC to respond to requests for information and to hold public board meetings.

Accountability mechanisms in the governing arrangement

Accountability mechanisms created by the MOA are closely related to how the MOA allocates authority among participants, such as the Watershed Protection and Partnership Council. Likewise, the CWC board also acts as an accountability mechanism. It includes representatives from all signatories, and any CWC decision regarding program design and implementation must be approved by a majority vote of the board. The board of 15 includes 12 members representing the watershed communities, and each of those members are elected by vote of the Town Supervisors of each of the towns in the watershed (MOA Article IV, Section 117; Catskill Watershed Corporation 2023). The CWC serves as a de-facto venue for information sharing among members of the agreement, as well as ensuring representation of watershed interests in decisions about watershed protection programs (Hanlon 2017).

As an independent entity, the CWC is accountable to the city through specific funding agreements. As a condition of the successive FADs, New York City is required to contract with CWC for implementation of various watershed protection and partnership programs. The contracts place various obligations upon CWC, such as limiting use of the city-funding to the relevant program scopes, quarterly reporting of all program activities and expenditures, as well as annual audits by an independent firm.

Within the CWC programs, contracts between CWC and program participants are the primary means of accountability. For instance, participants who are denied reimbursements for activities completed in the septic program or the stormwater management program may appeal such denials to the CWC Board (CWC Article 2A, CWC Article 5). Appeals to the CWC Board are also allowed in the Economic Development and Public Education programs if applicants are denied loans or grants (CWC Article 1). In turn, if a participant fails to abide by a contract, mechanisms are in place to terminate the contract, limit eligibility for future funding, and force compliance. For instance, if a loan recipient moves out of the watershed, they are required to pay back the loan on an accelerated schedule (CWC Article 1). Or, if an education program grant recipient fails to provide a final report on the use of the funds, the recipient may no longer participate in the program (CWC Article 4). The accountability mechanisms built into program contracts allow for third party review of critical decisions and provide sanctions if participants do not abide by the terms of the contract (Hanlon et al 2019).

The accountability mechanisms woven throughout the MOA and the various watershed programs serve two purposes: on one hand, ensuring compliance with the authorities and responsibilities allocated to the participants of the MOA and, on the other, resolving disagreements and disputes in cost effective and timely ways to encourage cooperation among the actors and support continued commitment to the governing arrangement.

Balanced flexibility and stability

Balanced flexibility and stability and the general system of rules

Federal and state laws support stability of the governing arrangement by establishing standards that must be achieved for the governing arrangement to remain viable. FAD and WSP reviews ensure participants in the governing arrangement follow through with their commitments, which supports stability. But those same accountability mechanisms provide scheduled opportunities to make changes in the governing arrangement, by extending or creating new, programs.

The general system of rules also provides for flexibility in achieving safe drinking water standards by allowing those standards to be met in different ways. As noted above, federal legislation allows for filtering of water or the creation of written agreements. State law allows New York City to acquire land through eminent domain. State laws also allow for the creation of intergovernmental arrangements. Overall, the general system of rules enables different pathways, pathways that remain open and could be pursued if circumstances regarding the governing arrangement change.

Balanced stability and flexibility and the governing arrangement

The MOA is a singular source of stability in this governing arrangement. Because the MOA creates the governing arrangement and represents the consensus among its signatories, it has not been re-opened and reconsidered. Flexibility is realized through other means, particularly within the different types of programs. For instance, the land acquisition program was designed to encourage stability (by linking its permanence and implementation to the continuing financial support of the rest of the watershed protection programs) and flexibility (defining procedures for program amendments to address changing circumstances and new issues or problems). Following extreme flooding events in 2011, the city created a flood buyout program in response to FAD and WSP revisions (NYC Department of Environmental Protection 2021). The flood buyout program is like the land acquisition program in that it is voluntary, watershed jurisdictions participate in identifying suitable properties, and once purchased, NYSDEC is granted perpetual easements. It differs in that the watershed jurisdictions are encouraged to take ownership of the parcels (NYC Department of Environmental Protection 2021).

In the case of CWC programs, stability is granted by the definition and guidelines established in the MOA (MOA Article 5). This is complemented by the periodic contracts signed by CWC and the city to fund the different watershed protection programs. These periodic contracts serve as opportunities to revise priorities and targets of different programs, in response to new or modified regulatory mandates established in the FAD or WSP. Over time, new CWC programs have emerged, whereas others have been terminated. For example, the septic program targeted individual residences. Homeowners could apply to have their septic systems rehabilitated or replaced (CWC Article 2). Over the years, the original septic system program has been expanded to include nonprofit organizations and businesses (CWC Article 2A). The salt and sand program, on the other hand, was terminated once all salt and sand storage facilities in the watersheds had been brought up to standard. ^[13]

Like the Land Acquisition Program, stability mechanisms in CWC programs typically appear in the contracts between the CWC and the programs’ participants. For instance, in the Economic Development Program, the recipient of a loan or grant must accept the loan or grant within a specified period, or the contract may be withdrawn, freeing up the money for another applicant (CWC Article 1). Or, if circumstances change, loan recipients may request revisions to the loan agreement upon recommendation of the CWC loan committee (CWC Article 1), or the CWC executive director may recommend to its board a program rule change, which must be approved through the vote of the CWC Board members. The latter type, much like with the land acquisition program, take place through the regular review processes, such as renewing of the FAD or through modifications to the contracts between the city and the CWC, particularly for the water quality programs, whereas the CWC Board may unilaterally modify the Economic Development or the Education Programs (MOA Article 5).

DISCUSSION AND CONCLUSION

We used the five SRSG principles to assess the design of the general system of rules and the governing arrangement for the New York City watersheds. When compared to the 1905–1996 period of water supply development, the governing arrangement marked by the 1997 MOA reshuffled the authorities and responsibilities of New York City, the watershed jurisdictions, and the state for managing water quality, infrastructure, economic development, and, most importantly, land management in the watersheds. No longer was the city the governor of water quality in the watersheds. Authority for managing human activity was shared among the watershed jurisdictions and the city. No longer was the condemnation of land the primary means of protecting water quality. Rather a voluntary, market based land acquisition program, buttressed by a wide range of water quality infrastructure programs protected water quality. Cooperation was sustained through an economic development program and numerous types of accountability mechanisms laced throughout the general system of rules and the governing arrangements, extending from individual program contracts to the New York State court system.

The New York City Watersheds governing arrangement is made possible, in part, because of the careful and creative institutional design of the MOA, an intergovernmental agreement. Authority and responsibility are allocated among the actors in complementary ways. Under U.S. and New York State law, New York City is responsible for meeting federally defined drinking water quality standards, and the MOA grants New York City authority to engage in critical activities to provide for and produce water quality protection. It still possesses the authority to acquire and protect sensitive lands, but in collaboration with local jurisdictions and landowners, who are also granted authority through the MOA. The city exercises authority to develop water quality programs (e.g., wastewater treatment plants, septic systems, and stormwater runoff), in collaboration with the CWC, who is allocated the authority to develop and implement the programs. The authority to develop and implement crucial activities not directly implicating water quality is allocated to actors most invested in those activities. Notably, the economic development programs are created and implemented by the CWC, which represents the interests and needs of the watershed jurisdictions. Likewise, accountability mechanisms are matched with the significance of the activities for the governing arrangement. Actions that could undermine the governing arrangement, such as New York City exercising eminent domain to acquire watershed lands, or watershed jurisdictions filing lawsuits to halt the issuance of a FAD, are matched with more authoritative accountability mechanisms that may impose strong penalties. Actions that violate program rules or contracts are matched with more moderate accountability mechanisms. The accountability mechanisms are designed to ensure that actors do not benefit from noncompliance and that the implementation and management of the programs is not compromised.

The MOA, in turn, was made possible by a general system of rules that provided actors with a rich menu of institutional tools to select from in creating a governing arrangement. The institutional tools include “the conditions of entry and exit” (Ostrom 1999:59), allowing actors to create organizations and intergovernmental arrangements, with the authority to provide and produce a range of public goods and services. Federal and state regulations also create responsibility for actors to achieve water quality standards. Accountability mechanisms, such as courts and state agencies, as well as open meeting and freedom of information laws, provide third party review of activities with the authority to penalize non-compliance (Ostrom 1999). Residents and elected and public officials participate in choices to use the institutional tools to create and revise the governing arrangements. These opportunities range from participating and providing feedback in public hearings, such as those held regarding the re-issuance of FADS, to elected officials voting on the adoption of intergovernmental agreements and contracts (Ostrom 1999).

The New York City Watershed Governing Arrangement has evolved over its 27-year existence, eliminating some programs, adding new programs, and revising others. These changes have been motivated by a variety of factors like achieving the goals of a program (e.g., salt and sand storage); responding to focusing events (e.g., tropical storms); or addressing ongoing conflicts among participants (e.g., the ownership and use of land). Providing participants with opportunities to change the general system of rules and the governing arrangement, allows them to respond to changing circumstances, while maintaining the governing arrangement. A robust polycentric system has emerged that balances stability and flexibility.

We extended polycentricity theory by highlighting, further developing, and applying the concept of the general system of rules to a case study (Parks and Oakerson 1989, Ostrom 1999, Oakerson and Parks 2011). Identifying and incorporating the general system of rules that made possible the creation and adoption of the MOA allowed for a more complete explanation of the MOA while also suggesting some policy implications. The MOA and the form it took was not inevitable. The general system of rules provided possibilities. It presented opportunities for actors to attempt to resolve collective problems or provide for shared benefits by creating or revising polycentric arrangements. The concept of a “general system of rules” supports scholars in explaining why a governing arrangement was devised or revised and its design. The possibilities, however, are limited to the scope of a particular general system of rules. In most, or all settings, actors are not free to design any type of governing arrangement that suits them. The generalizability of policy solutions is limited by the general system of rules. Governing arrangements that emerge in New York will likely not emerge in other states with different general systems of rules. Suggesting that a particularly successful governing arrangement be adopted in other settings is not productive without also specifying features of the enabling environment that would permit its creation.

We used the SRSG principles to evaluate both the general system of rules and the polycentric governing arrangement that the rules enabled. The principles allow scholars to examine the design of both types of institutional arrangements and whether those designs support capacities to enable collective action and shared governance to provide for, produce, and protect public goods and common pool resources. The provision and distribution of authorities and responsibilities; the availability of resources; and the means of ensuring compliance with the general system of rules and polycentric governing arrangements, are critical for ongoing governance.^[14] Applying the same set of principles to assess both sets of institutional arrangements explicitly recognizes the connections between them and allows for a systematic analysis of both on similar terms. Thus, analysts are encouraged to explain the strengths and limitations of polycentric arrangements by not only analyzing their design but also analyzing the sources of those designs. A polycentric arrangement may not perform as expected because of a design flaw, such as the lack of accountability mechanisms as actors failed to include them in the arrangement, or because of a shortcoming or gap in the general system of rules, such as failing to enable the creation of accountability mechanisms. The SRSG principles provide a shared set of concepts with which to explore and evaluate both governance and management, allowing analysts to draw policy lessons targeting the general system of rules and the polycentric governing arrangements.

Using the SRSG principles to examine and evaluate the distribution and design of authority, responsibility, fiscal and resource capacity, accountability, and adaptation highlighted their configural nature. While we assessed the general system of rules and polycentric governing arrangements using each principle consecutively, it became clear that the principles worked interactively as we found some institutional features appeared as instances of authority and instances of accountability. Other principles are more challenging to apply separately, such as authority and responsibility. Although they are distinct evaluative criteria, they “speak” to one another. Authority without responsibility and vice versa suggest institutional malfunction as with the former there is no reason to act and with the latter there is no power to act.

The principles appear promising as evaluative criteria for assessing the design and performance of institutional arrangements. However, additional development is required. One of the more vexing issues is identifying the degree to which the institutional arrangement exhibits a principle, and the extent to which the principle must be exhibited for the arrangement to perform well. This issue becomes even more challenging with the recognition that the principles are configural and contingent. Teasing out the impact of one on the overall performance of the governing arrangement or the general system of rules is difficult to do. This is analogous to how E. Ostrom’s design principles for long enduring self-governance (Ostrom 1990) should be viewed. Are they simply present or absent? Should they be treated in an additive fashion (Cox et al. 2010) or configurally (Baggio et al. 2016)? Sorting out these epistemological issues is necessary to move the SRSG principles forward.

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^[1] As V. Ostrom (1999:58) pointed out, in reflecting upon Ostrom et al. (1961), “The task of formulating a general system of rules applicable to the conduct of governmental units in metropolitan areas and of maintaining institutional facilities appropriate to enforce such rules of law is a problem that we failed to treat.”
^[2] Aligica and Tarko (2012:245) explain, “The multiplicity of decision centers was a meaningful way of defining polycentricity only under the rule of law. There are many forms of organization that might seem analogous to a polycentric order. However, not all of them had the attributes associated to polycentricity as long as they were lacking an encompassing system of rules.”
^[3] By provision, Parks and Oakerson (1989) mean the collective choice processes that determine the goods and services to be made available and their quality, as well as regulations, and revenue raising. Production is the creation of goods and services (Parks and Oakerson 1989).
^[4] The legal tools of association encompass and expand on two of V. Ostrom’s (1999) levels of conduct, entry and exit, and citizen participation in governance. Ensuring compliance, both with the legal tools of association and the institutional arrangements that form polycentric systems remains vital. State and federal governments provide court systems, and the polycentric systems may be designed with mechanisms for supporting rule-following behavior.
^[5] The SRSG principles and the general system of rules are distinct institutional tools. The general system of rules consist of constitution articles, statutory laws, and administrative regulations. They empower or enable actors to create organizations, legal relations, and mechanisms, such as third party review, or legislative sunsets. The SRSG principles are concepts used to evaluate institutional arrangements, such as the general system of rules, or polycentric governing arrangements, or organizations.
^[6] Polycentricity scholars have used some concepts similar to the SRSG principles to explain and assess polycentric governing arrangements (see Garrick and Villamayor-Tomas 2019, Heikkila 2019, Koontz 2019).
^[7] Initially, New York City attempted to pursue option 2. The watershed jurisdictions filed lawsuits in response, calling into question the city’s ability to protect the watersheds in a timely fashion and throwing into doubt the issuance of an FAD (Finnegan 1997). Then Governor of New York, George Pataki, provided the leadership to orchestrate option 3, even in a setting characterized by little trust (Soll 2013, Galusha 2016). In addition, the FAD requires that the city develop and regularly update a plan for implementing option 1, in case option 3 ever fails (National Research Council 2000).
^[8] CWC’s members are the towns with 100 or more acres within the Watershed.
^[9] For an in-depth discussion on the creation of credible commitments in the NYC Watersheds governing arrangement, see Hanlon et al. (2019) and Schlager et al. (2021).
^[10] Our assessment focuses on the regulatory documents that guide and constrain the relationships between New York City and local governments in the watersheds. In addition to these, there are others (such as programs on forestry and agricultural best management practices) funded directly by the city to individuals or through intermediate associations. One of those organizations is the Watershed Agricultural Council (WAC), which implements a variant of payment for ecosystem services programs on watershed lands (see Kousky 2015).
^[11] For example, the MOA includes a requirement that New York City’s wastewater treatment plants accept waste generated from plants built or rehabilitated by CWC’s wastewater program. Under a later filtration avoidance determination, the city signed a side agreement with the U.S. Environmental Protection Agency that it would accept septage from any septic system in the Catskill-Delaware watershed. Without consulting its partners in the watersheds, in early 2022 the city decided to cut the amount of waste it would accept by almost half as a means to reduce its greenhouse gas emissions (Klukkert 2022a 2022b). This led to objections from watershed jurisdictions, the CWC, state agencies, and state legislators that the city was in violation of the MOA (Klukkert 2022a 2022b). As the MOA members were preparing to bring their complaint to the WPPC, the city recognized its error and continued to accept waste from watershed septic systems.
^[12] The land acquisition program also includes the purchasing of easements, whereby the landowner agrees to restrictions on the uses of the land in exchange for cash and property tax relief while retaining ownership of the land. Easements are purchased and managed by the city in collaboration with the Watershed Agricultural Council, a farmer-run non-profit organization focused on farmer outreach and land management in the watersheds, with the goal of protecting water quality (Kousky 2015). As of 2019, New York City has acquired approximately 154,000 acres of land through fee simple and easements (National Academies of Sciences 2020).
^[13] https://cwconline.org/programs/community-initiatives/
^[14] Although polycentricity scholars have used some of the SRSG principles to assess individual case studies, the full set of principles have not been systematically applied to polycentric governing arrangements, and they have not been applied to the general system of rules (Garrick and Villamayor Tomas 2019, Heikkila 2019, Koontz 2019).

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