Institutions, or the “rules of the game”' that constrain and enable human behavior, are fundamental determinants of economic development and social well-being (North 1990, Acemoglu, Johnson and Robinson 2005; 2012). Pioneering work in new institutional economics (NIE) has provided a macro level framework to analyze why institutions emerge, prevail, and change in societies (North 1990; 1991; 2005). 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 (Williamson 1975; 2000, Dixit 1996, Ostrom 1990; 1996; 2005, Ménard and Shirley 2022). 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 (Besley 2007, Besley and Persson 2018, Lloyd and Lee 2018). A growing literature has extended these insights to the environment, documenting how political institutions shape deforestation, pollution, natural resource extraction, and climate change (Burgess et al. 2012, Pailler 2018, Hu 2021, Miteva and Pattanayak 2021, Moore et al. 2023, Gulzar et al. 2024, Jia 2025).

In comparison to this literature linking institutions to policymaking and outcomes, less attention has been devoted to analyzing institutional 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 (Andrews, Pritchett and Woolcock 2017, Ménard 2018, Ménard and Shirley 2014). Emerging theoretical work in new public management (NPM) by Besley and Ghatak (2005, 2018), among others, 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 (Finan, Olken and Pande 2017). From an empirical perspective, however, we know remarkably little about the role of these non-political actors in delivering environmental outcomes (Besley et al. 2022; Axbard and Deng 2024, Dipoppa and Gulzar 2024), and even less about how the their institutional contexts (e.g., local ties, social proximity, and informational advantages (Xu et al. 2023, Bhavnani and Lee, 2018, Pepinsky et al. 2017) moderate these roles.

For this workshop, we use a pair of case studies from India to draw on insights from NIE, NPE and NPM for delivering climate solutions. First, we examine 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. This “NGO effect” has implications for the generalizability and scalability of evidence from experimental research conducted with local implementation partners.

Second, we examine 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.

Key references

• Andrews, Matt, Lant Pritchett, and Michael Woolcock. 2017. Building State Capability: Evidence, Analysis, Action. Oxford: Oxford University Press.
• Besley, Timothy. "The new political economy." The Economic Journal 117, no. 524 (2007): F570-F587.
• Besley, Timothy, and Maitreesh Ghatak. "Competition and incentives with motivated agents." American economic review 95, no. 3 (2005): 616-636.
• Bhavnani, Rikhil R., and Alexander Lee. "Local embeddedness and bureaucratic performance: Evidence from India." The Journal of Politics 80, no. 1 (2018): 71-87.
• Bowles, Samuel, and Wendy Carlin. 2023. "Foundations of an expanded community of fate." Daedalus 152, no. 1: 19-24.
• Lemos, Maria Carmen, and Arun Agrawal. 2006. "Environmental Governance." Annual Review of Environment and Resources 31: 297–325.
• Ménard, Claude, and Mary M. Shirley. "Advanced introduction to new institutional economics." In Advanced Introduction to New Institutional Economics. Edward Elgar Publishing, 2022.
• Usmani, F., Jeuland, M., & Pattanayak, S. K. (2024). NGOs and the Effectiveness of Interventions. Review of Economics and Statistics, 106(6), 1690-1708.