Structuring Institutional Analysis for Urban Ecosystems

Context and Challenges in Urban Forest Sustainability

• Demographic Trends and Ecosystem Reliance:

  • More than $50\%$ of the global population resides in urban environments, a figure projected to rise to $60\%$ by $2025$

  • Urban populations depend heavily on urban forests for key ecosystem services that act as public goods, including:

  • Air and water purification

  • Energy conservation

  • Carbon storage and sequestration

  • Ambient air temperature regulation and cooling

  • Wildlife habitat preservation

  • Recreational opportunities

  • Social, physical, and psychological human well-being

  • Local economic stimulation

• Structural and Functional Declines:

  • Persistent declines in urban forest canopy cover, tree structure, and ecological functions have been documented across cities in the United States

  • Because urban forests are human-engineered coupled social-ecological systems (SESs), system sustainability relies on both ecological resilience and engineered robustness

  • Sustainable urban forestry requires maintaining a robust population of trees and associated vegetation across diverse subsystems (street trees, park trees, treed preserves, and private residential parcels) over space and time without forfeiting long-term ecosystem service provision

• Social Dilemmas and Market Failures:

  • Absence of Markets for Ecosystem Services: Because functional markets for public ecosystem services do not exist, private property owners frequently manage land for commodities traded in formal markets (such as real estate development) at the expense of natural capital

  • The Free-Rider Problem: Individual investors who fund tree planting or maintenance generate benefits enjoyed equally by neighboring non-investors without cost. Conversely, an individual actor may perceive single-handed conservation efforts as negligible in the broader landscape, leading to under-investment in natural capital

  • Transaction Costs: Organizing collective action across dispersed private and public landowners incurs significant time, effort, and coordination costs

  • Bounded Rationality vs. Rational Egoism: Historical natural resource models assumed individuals behave exclusively as rational egoists, leading inevitably to resource degradation (as in the Tragedy of the Commons). In reality, humans exhibit bounded rationality—they are capable of learning, adopting norms, following rules, and organizing institutional governance structures to overcome social dilemmas

Defining Institutions in Urban Social-Ecological Systems

• Disciplinary Divergence:

  • Interdisciplinary urban ecosystem research suffers from inconsistent definitions of "institutions," often conflating the term with organizational entities or treating it as a minor exogenous variable

  • Two dominant traditions define institutional theory:

  • Institutions-as-Equilibria: Rooted in classical economics and social choice theory; views institutions merely as stable patterns of behavior or equilibrium outcomes emerging from actor preferences and optimizing behavior. This perspective fails to isolate underlying normative obligations or community-enforced rules

  • Institutions-as-Norms/Rules: Supported by New Institutional Economics (NIE); asserts that stable behavior is rooted in shared societal beliefs regarding permissible and impermissible conduct, enforced through formal laws, informal norms, or mutual strategies

• The Institutional Analysis and Development (IAD) Typology:

  • Developed by Kiser and Ostrom ($1982$) and Ostrom ($1990$, $2005$), the IAD framework establishes a precise tripartite distinction among institutions:

  • Rules: Explicit institutional prescriptions that require, prohibit, or permit specific actions or outcomes, backed by an explicit sanction or enforcement mechanism (an "or else" component). Rules-in-use represent actual practices followed on the ground, which may diverge from formal written laws

  • Norms: Shared moral or social values regarding appropriate behavior held by individuals, lacking formal legal sanctions but enforced via social censure or internalized obligation

  • Shared Strategies: Common plans of action adopted by actors based on their understanding of existing rules and social norms, without explicit prescriptive operators

• Community Forestry Analogy:

  • According to Sanesi ($2011$: $35$), "The term 'Community forestry' (CF) includes all the forest management types that provide both economic and social goals, under the control (or property) of a local community or larger social group. CF management is often set in a larger ecological landscape with other land uses."

  • Urban forests fit this conceptualization as community forests set within complex, highly variable land-use landscapes where the majority of tree cover is privately owned ($Clark\,et\,al.\,1997$

Multi-Scale Institutional Landscape of Urban Parcel Management

• Property Rights and Governance Complexity:

  • Urban forests are highly fragmented across private individual residential parcels, private shared developments, and public right-of-way (PROW) corridors

  • Governance is polycentric, involving operational-level land managers, municipal departments, regional utilities, and neighborhood organizations

• Actors and Institutional Interactions:

  • Household parcel management sits at the center of a dense network of formal rules (laws, ordinances, contracts) and informal norms (aesthetic expectations, social pressure)

• Formal and Informal Institutional Links in Urban Neighborhoods:

  • City Government: Establishes municipal tree codes, zoning restrictions, tree preservation permits, and building setbacks. Interacts formally with household parcel managers, developers, homeowners associations (HOAs), and neighborhood associations

  • Developers & HOAs: Real estate developers create binding land covenants, utility easements, and tree preservation easements during build-out. HOAs enforce bylaws governing landscape design, approved plant species, dead tree removal timing, and vegetation heights

  • Green Businesses: Nursery suppliers and landscaping contractors influence property owner strategies through available plant inventory, pricing, and service offerings

  • Neighbors & Neighborhood Associations: Neighbor-to-neighbor interactions are governed primarily by informal norms (e.g., peer pressure regarding lawn aesthetics, leaf litter, branch overgrowth). Neighborhood associations maintain both formal communication channels and informal social expectations

  • Greening Non-Profits: Offer tree canopy expansion programs, subsidized plantings, and educational outreach to reshape resident land management strategies

  • Utilities and Utility Regulators: Enforce mandatory rights-of-way clearances and tree pruning standards around electric and municipal utility infrastructure

The Institutional Analysis and Development (IAD) Framework

• Structure of the Framework:

  • The IAD framework connects exogenous variables to an internal action situation, generating patterns of interaction that yield outcomes evaluated against systemic criteria

• Exogenous Variables:

  • Biophysical Conditions: The natural stock, climate, soil parameters, tree species composition, and spatial layout

  • Community Attributes: Cultural values, trust levels, historical legacies, income distribution, and degree of shared understanding among actors

  • Institutions (Rules-in-Use): The active formal and informal rules, norms, and strategies governing behavior

• The Action Situation as a Holon:

  • An action situation is a conceptual arena where actors interact, solve problems, exchange goods, or dominate one another

  • It operates as a holon—a nested subassembly of part-whole units in complex adaptive systems ($Ostrom\,2005$: $11$). Action situations can be isolated for analytical focus while remaining embedded within larger multi-level systems

• Internal Components of an Action Situation:

  • Actors: Individuals or collective entities participating in the situation

  • Positions: Defined roles occupied by actors (e.g., Urban Forester, Landowner, Tree Board Member)

  • Actions: Specific measures actors can take in a given position

  • Information: The scope and quality of data available to actors regarding state variables and choices

  • Control: The degree of influence an actor exerts over action-outcome linkages

  • Net Costs and Benefits (Payoffs): The rewards and penalties assigned to specific actions and outcomes

  • Potential Outcomes: The resultant physical and social states produced by chosen actions

• Seven Universal Boundary Rules Governing Action Situations:

  • Position Rules: Assign specific positions and legal roles to participants

  • Boundary Rules: Dictate how actors enter, leave, or qualify for specific positions

  • Choice Rules: Prescribe which actions are mandatory, allowed, or prohibited for a given position

  • Information Rules: Define communication channels, public notices, disclosure mandates, and information flow

  • Aggregation Rules: Determine whether decisions require individual autonomy, majority consensus, or sole administrative authority

  • Payoff Rules: Establish fees, sanctions, financial incentives, or legal liabilities associated with actions

  • Scope Rules: Delimit the boundaries of allowable outcomes, spatial jurisdictions, or target resource conditions

• Three Nested Operational Levels of Governance:

  • Operational Rules: Regulate day-to-day, on-the-ground management decisions and physical actions (e.g., requiring a permit to remove a tree)

  • Collective-Choice Rules: Define how operational rules are established, monitored, revised, or repealed (e.g., voting procedures used by a city tree commission to alter municipal ordinances)

  • Constitutional Rules: Determine who is eligible to participate in collective-choice policy decisions and dictate the foundational rules used to formulate collective-choice policies

• Ostrom’s Institutional Design Principles for Social-Ecological Resilience:

  • Principle 1 (Communication): Clear, low-cost channels for user communication exist

  • Principle 2a (Resource Boundaries): Spatial boundaries of the natural resource are clearly demarcated

  • Principle 2b (User Boundaries): Eligibility rights to harvest or manage the resource are explicitly defined

  • Principle 3a (Congruence with Local Conditions): Harvesting and management rules fit local biophysical and social conditions

  • Principle 3b (Proportionality): Distribution of benefits is proportional to required inputs and costs incurred

  • Principle 4 (Collective Choice): Most individuals affected by operational rules can participate in modifying them

  • Principle 5 (Recognition of Rights): External governmental authorities respect local rule-making autonomy

  • Principle 6a (Monitoring Resource): Regular monitoring of physical resource conditions occurs

  • Principle 6b (Monitoring Users): Monitoring of user behavior is carried out by users themselves or accountable agents

  • Principle 7 (Graduated Sanctions): Rule violations trigger incremental sanctions depending on severity and context

  • Principle 8 (Nested Enterprises): Governance activities are organized across multiple nested layers for complex ecosystems

Practical Application: Street Tree Sub-System Analysis

• Street Trees as Managed Public Goods:

  • Street trees located within the municipal Public Right-of-Way (PROW) represent a distinct subsystem of the urban forest

  • Their governance involves shared rights and duties between private adjacent landowners and city departments

• Operational Action Situation: Street Tree Removal and Replacement:

  • Governed by municipal tree ordinances and local property boundary definitions

• Participants & Positions: Adjacent property owners and the City Urban Forester act as street tree managers

• Boundary Rules: Municipal street tree ordinances define the job duties of the urban forester; property deeds define adjacent landowner responsibilities

• Position Rules: Designate the adjacent owner or city forester as authorized street tree managers

• Choice Rules: Mandatory requirement that street tree managers remove and replace hazardous, dead, or dying street trees with approved species

• Information Rules: Require public acquisition of tree care permits; require the city to post public tree removal signs for $10$ days prior to action; maintain an approved tree species list and care manual

• Aggregation Rules: Adjacent owners become eligible to remove/replant trees only after obtaining a permit from the urban forester; city agents retain ultimate authority

• Payoff Rules: Mandate permit fees, fine sanctions for unpermitted removals, court-enforced liability risks, and market costs for tree work contractors

• Scope Rules: Enforce management goals for public safety and canopy species composition across the municipal PROW

  • Collective Choice Action Situation: Street Tree Policy-Making:

• Establishes or revises the operational rules governing street tree management

• Participants & Positions: Tree Board members and City Council members acting as street tree policy makers

• Boundary Rules: City code defines procedures for candidate nomination, election, administrative appointment, and personnel duties

• Position Rules: State statutes grant policy-making authority over PROW vegetation to City Parks Departments and City Councils

• Choice Rules: Define legislative drafting workflows; Tree Board drafts policies, City Council collects public feedback, requests revisions, and votes on adoption

• Information Rules: Direct procedures for notifying the public, holding public hearings, receiving citizen feedback, and leveraging past technical models

• Aggregation Rules: Designate the Tree Board as the primary drafting body and the City Council as the voting body with pass/fail legislative authority

• Payoff Rules: Dictate city department budget allocations, municipal permitting fees, legal penalty schedules, and market transaction parameters

• Scope Rules: State statutes delegate PROW policy authority to municipalities; council adoption converts drafts into binding public policy

  • Institutional Failures and Sub-Optimal Outcomes in Urban Forestry:

• Ambiguity in PROW Definitions: Landowners frequently fail to understand that land adjacent to street curbs lies within the public right-of-way, leading to legal confusion over who owns or must care for street trees ($Fischer\,and\,Steed\,2008$

• High Permitting Transaction Costs: Mandating that private property owners pay permit fees and submit paperwork to prune or remove dying PROW trees increases personal transaction costs in time and money

• Defective Payoff and Sanction Rules: If municipalities lack personnel to monitor illegal tree removals or fail to enforce statutory fines, the cost of breaking the rule falls below the cost of compliance. Private actors are incentivized to remove trees illegally or leave empty planting spaces, producing sub-optimal tree canopy outcomes