Emergent polycentric governance in response to drought: Motivations, transaction costs, and feedback in corporate and city collaboration

Abstract The threat of service failures because of climate shocks can provoke a re‐negotiation of roles and responsibilities among private and public actors, and a shift towards more polycentric arrangements. This research builds on frameworks for documenting the emergence and evolution of polycentric governance arrangements through an analysis of the enrollment of private corporate actors in water provisioning services in response to the “Day Zero” 2017–2018 drought in Cape Town, South Africa. Through an analysis of interview data, we document the motivations of the corporate and municipal actors to coordinate their efforts to address acute water shortages through a novel governance venue and mechanism: Water Service Intermediaries. We document their experience with collaboration in the governance arrangements that evolved. The case illustrates both the potential, but also the limitations of shifts toward polycentricity in the context of critical resource provisioning. Our actor‐centric approach documents the transaction and material costs associated with new regulatory burdens as the actors negotiated their respective responsibilities and roles. Actors face coordination challenges associated with their dependence on shared physical infrastructure, tensions associated with duties of care towards specific constituencies, and the friction entailed in reconciling their new nodal responsibilities and core missions. While the experiment in this form of polycentric water provisioning was curtailed at the end of the drought, the evidence of feedback and learning among private and public actors indicates a shift in mindsets concerning joint responsibilities for urban resilience, and the potential for future collaboration in polycentric governance around novel issues.