Institutional Externalities and Collaborative Governance in the Cuyahoga River Watershed (CRW)

ABSTRACT Institutional externalities emerge when actors, such as individuals, government agencies, and firms, participate in multiple policy forums to address shared social–ecological dilemmas. These externalities occur when decisions or actions in one forum generate unintended consequences for actors' capacities to contribute to the functions, operations, or decisions of other forums. This study investigates institutional externalities in collaborative environmental governance by asking: How do institutional externalities manifest in collaborative interactions aimed at addressing watershed dilemmas, and what factors drive these externalities? Employing a mixed‐methods design that integrates secondary document analysis, a survey, and interviews, the study uses the Cuyahoga River Watershed (CRW) in Ohio, USA, as an empirical case. A conceptually grounded methodological framework was developed to quantify the externalities experienced by actors participating in multiple policy forums. Findings indicate that the governance structure within the CRW generates modest positive institutional externalities. This outcome may be explained by the concentration of governance in a small number of central forums within the CRW, the differentiated functions among forums, and the double‐edged roles of some forums, which can simultaneously facilitate collaboration and impose coordination burdens. The outcomes are also shaped by forum's type, mandates and the functional scope of forums. Additionally, assessing institutional externalities through multiple indicators provides a more nuanced understanding of collaborative dynamics than single indicators. This study advances our knowledge of institutional externalities in collaborative governance. Furthermore, it provides policymakers and resource managers with insights into designing effective and efficient governance structures for watersheds and other natural resources.