Institutions, or the “rules of the game”' that constrain and enable human behavior, are fundamental determinants of economic development and social well-being. Pioneering work in new institutional economics (NIE) has provided a macro level framework to analyze why institutions emerge, prevail, and change in societies. Using the conceptual apparatus of property rights, transaction costs, and incomplete contracts, this literature has answered foundational questions about organization of economies, bargaining in polities, and issues surrounding collective action and common-pool resource management. Recent scholarship in the new political economy (NPE) tradition has utilized agency theory to explain how micro-level details of political institutions - electoral rules, forms of government and democracy, political reservation and term limits - influence policy outcomes. A growing literature has extended these insights to climate related outcomes, documenting how political institutions shape deforestation, pollution, natural resource extraction, and climate change mitigation and adaptation.

In comparison to this literature linking institutions to policymaking and outcomes, less attention has been devoted to arrangements at the policy implementation stage i.e., public sector organizations, civil society and bureaucrats responsible for implementing policies. These “meso-organizations” that interpret, adapt, implement and enforce macro-level rules of the game in specific policy domains remain largely a black box in the economics literature. Emerging theoretical work in new public management (NPM) and a growing empirical literature has begun to open this black box, for example, studying how the selection, allocation, and incentives of bureaucrats shape public service delivery. From an empirical perspective, however, we know remarkably little about the role of these non-political actors in delivering environmental outcomes, and even less about how their institutional contexts (e.g., local ties, social proximity, and informational advantages) moderate these roles.

For this talk, we use a pair of case studies from India to draw on insights from NIE, NPE and NPM for delivering climate solutions. First, we briefly summarize a project examining if interventions by non-governmental organizations (NGOs) are often more effective than comparable efforts by other actors. Combining a stratified field experiment in India with a triple-differences estimation strategy, we show that a local NGO’s prior engagement with target communities increases the effectiveness of a technology-promotion intervention implemented by it by at least 30 percent.

Second, we describe in more detail how the assignment of individual bureaucrats to regions of work shapes policy outcomes. The Indian Forest Service, elite officers recruited by the central government and assigned to states for life, are responsible for conservation and the day-to-day management of India's forests, wildlife, and natural resources. We study whether and how assigning forest bureaucrats to work in their home regions of origin affects bureaucratic performance. We build a novel panel dataset on characteristics and work history of IFoS bureaucrats (using text-parsing techniques and link them to their performance measures at the officer-level and district-level i.e., forest administration units that they govern). Utilizing quasi-random variation in home state assignment generated by an allocation rule, we examine how the social proximity of forest bureaucrats in regions of their work shapes forest governance and conservation outcomes.

In conclusion, we make the case that institutions (governance, rules of the game, transaction) are vital, especially because formal contracts quite limited for implementation (‘post-contract’ adjustments) of policies, programs, and projects in the domain of climate solutions. The cases we present show that it is not just the quantity, but the micro-institutional type and nature of institutions that mater. In particular, we argue for more attention to civil society (and as such to social norms, intrinsic motivations, civic virtue), at least as a complement to state & markets.