From multilateral organizations to transactions: Reconceptualizing the governance of public goods

This essay challenges the assumption that hierarchical governance through multilateral organizations is generally an efficient structure for the provision of global public goods. Drawing on transaction costs economics, we argue that hierarchical governance often obscures rather than resolves provision challenges. Our arguments focus on placing transactions as the unit of analysis rather than organizational forms, as extreme asset specificity, severe monitoring difficulties, and adaptation requirements—encompassing the frequency and complexity of ex-post modifications needed as environments evolve— create demands that existing structures cannot accommodate. Using the United Nations peacekeeping transformation in the Congo (MONUSCO) as an illustrative case, we demonstrate how matching governance mechanisms to transaction attributes enhanced provision effectiveness. These ideas challenge existing theory by revealing the dual importance of implementation effectiveness and problem recognition, as well as the necessity of governance differentiation due to transaction heterogeneity. While acknowledging institutional constraints on immediate reconfiguration, we offer several opportunities for future research that recognize transactions as the unit of analysis in global governance.